Wealthy French eye London properties to escape punishing tax rate
French buyer interest in properties in London’s most affluent areas has risen by almost a fifth in the first three months of the year, according to property consultancy Knight Frank.
Online enquiries from across the Channel have risen by 19 per cent between January and March as many wealthy French nationals consider relocating amid fears that whoever emerges victorious in the upcoming presidential elections will heavily tax them.
President Nicolas Sarkozy, who is seeking a second term in office, has sought to dismiss claims that he favours the rich by promising to tax incomes made via investments and introduce a levy for French nationals who live abroad to avoid high rates of tax.
Socialist candidate Francois Hollande is tipped to oust Sarkozy from Élysée Palace and his tough stance on taxing the wealthy is thought to have boosted his popularity. He has vowed to target the rich with a 75 per cent tax rate on annual incomes above 1m euros.
With Hollande emerging as the front-runner for the French presidency, it would seem that France’s wealthy are making contingency plans to protect their fortunes.
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Liam Bailey, Knight Frank’s global head of residential research, told Reuters: “It is early to see the impact of the proposed wealth taxes in France in terms of actual purchases … but there is compelling evidence from our web search statistics.
“This evidence from web search activity backs up a noticeable spike in anecdotal comments from [our] office network, where French applicants have become much more noticeable in recent months.”
Richard Barber, partner at upmarket London property agent WA Ellis, believes that the lure of more open space could be why London is attractive to French people.
He said: “London is, if you’re a Parisian, the next city you would go to because it has a nice lifestyle. People do like the fact that we have gardens. Parisians often live in big apartments and people like the idea of having a house even if it is in the suburbs.
“I live in south London and you notice that there are a lot of French accents on the commons. You do have a bit more open space in London than you do in Paris.”
The fact that enquiries from France for central London homes worth less than 1m euros have fallen sharply gives further weight to the argument that the wealthy across the Channel are interested in moving to London.
Knight Frank went on to reveal that enquiries from France about homes valued between £1m and £5m are up 11 per cent this year, while interest in homes worth more than £5m is up by 30 per cent.