This is just in from Danny Silver in France. If you are interested in a partnership investment, please get in touch! (http://own2invest.com)
**Conclusion : No-one can say with 100% certainty that the above laws will cause a property boom; but we can speak from "history". When we look at UK; Germany; Sweden; Canada & Italy – when they brought in similar "mortgage interest" and "capital" tax incentives, their markets went thru an average of 5 very good "boom" years before settling down. In fact UK and Italy had to stop the "breaks"! The new President of France has introduced revolutionary "tax breaks", (as promised!), with the aim of "moving" the French property market from being a nation of "tenants" to a nation of "home owners". The Presidents aim is to move residential home ownership in France from 25% to 50% in his first 5 year term of office. This compares with UK, Germany and other countries with home ownership of over 80%. Link to publication of laws in "La Figaro" http://www.lefigaro.fr/impots/20070717.WCP000000216_paquet_fiscal_ce_qui_change.html
We have studied the new laws carefully with the help of our fiscalists, tax lawyers and notaires and have made comments & conclusions)
TAX RELIEF ON MORTGAGE INTEREST :
Tax relief on mortgages for singles to 3750€ and married 7500€ plus 500€ for each child for first five years – up to 20% of net income. To be deducted from nett income. * *Comment : this is ideal for the first time home owner – the market/property we specialise in for investors!
SUPPRESSION OF INHERITANCE TAX :
Their will be no inheritance tax between spouses, if one spouse/partner invested in only his/her name. Children allowance is increased from 50.000€ to 150.000€, (per child, per parent!), before any tax may be due. Therefore one child allowance is 300.000€ and 3 children is 900.000€! Gift tax : you now give children 30.000€, (instead of 3000€), per year in cash and deduct from tax; but now you can give a 300.000€ property as gift – every 6 years! There is no change in succession laws for children. * *Comment : enormous benefit/incentive for middle and upper income families to own property – either in their name; or the child-children!! Naturally it is excellent to give tax breaks and incentives, but people must be allowed to have more money to benefit – therefore the following laws are introduced :-
WORK HOURS :
If you work longer than 35 hours per week; all hours over 35 are exempt from both tax and social charges for both employee and employer!!
TAX (ALL) :
On your total worldwide income – income; investments; stocks; property; etc etc etc etc etc : You cannot pay more than 50%! Also "plus fortune" tax now allows you to deduct 30% of any property; but the 50% rule applies, effectively negating this tax.*Comment : effectively reduces top income tax by 20% and invalidates the "plus fortune" tax. Today a married couple with "gross" joint income of 40.000€, (approx. £30.000/$60.000), pay approx. 20% tax before deducting all their expenses. This normally reduces tax to approx. 14%. And even less with children. Then you deduct the mortgage interest on net!
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