Selling ‘panic’ on France’s luxury property market as millionaires rush to flee looming tax hikes

More than 400 €1million homes put on the market in Paris since socialist  Francois Hollande elected to power

  • France’s super-rich are  looking to relocate to ‘wealth-friendly’ countries like Britain
  • Recruitment agency for  high-paid banking jobs in London sees increase in French  candidates

By Ian Sparks

PUBLISHED:10:51 EST, 8  October 2012| UPDATED:10:53 EST, 8 October 2012

France’s luxury property market has hit a  selling ‘panic’ as millionaires rush to flee the socialist government’s looming  tax hikes, a leading estate agent has revealed.

More than 400 Paris homes worth more than €1million have been put on the market since President Francois Hollande came to  power in May – more than double the same period last year.

Many of France’s super-rich want to escape to  ‘wealth-friendly’ countries like Britain, Switzerland and Luxembourg.

Exodus: The super-wealthy appear to be abandoning Paris (pictured) for wealth-friendly countries. A total of 400 homes worth more than ¿1million in the French capital have been put on the market since May
Exodus: The super-wealthy appear to be abandoning Paris  (pictured) for wealth-friendly countries. A total of 400 homes worth more than  ¿1million in the French capital have been put on the market since May

The exodus has been triggered by a new higher  tax of 75 per cent on all earnings over €1million – £780,000 – which will come  into force later this year.

They also fear more tough new taxes on moving  money overseas and sales of company shares.

Paris estate agent Daniel Feau said: ‘It’s  nearly a general panic. Some 400 to 500 residences worth more than €1million  have come onto the Paris market since May.

‘And the profile of those who are leaving has  changed, from the idle rich to managers of major international corporations and  entrepreneurs who are scared of a marginal tax rate of 62.21 percent on sales of  stock.’

Thibault de Saint Vincent, president of  Barnes France estate agents, added: ‘With the Internet it is now possible to  work in any corner of the world.

‘Those who are going abroad fear a future  taxes on income and capital movements.’

Looming tax rise: France's super-wealthy have been looking to relocate since Francois Hollande (pictured) came to powerLooming tax rise: France’s super-wealthy have been  looking to relocate since Francois Hollande (pictured) came to power

In London, recruitment agency Astbury Martin – which specialises in highly-paid banking jobs – said it had seen a 51 per cent  in applications from French jobseekers.

Managing director Jonathan Nicholson said:  ‘There is a definite spike in French-speaking candidates.

‘We have not seen similar increases in  candidates from other countries, so it may well be connected to May’s change in  government in France.’

A separate survey by website Totaljobs.com  revealed 42 percent of French workers were willing to move to the UK, compared  to only 32 percent of the global workforce which would be happy to work in  France.

And British estate agent Sotherby’s said its  French offices sold more than 100 properties over €1.7 million between April and  June this year – a marked increase on the same period in 2011.

Sotheby’s French boss Alexander Kraft said:  ‘The result of the presidential election has had a real impact on our  sales.

‘Now a large number of wealthy French  families are leaving the country as a direct result of the proposals of the new  government.

‘These properties are then bought up by  foreign investors looking for a stable real estate market like France to invest  in.

‘It shows the high-end property market is  holding up very well, even in these difficult times.’

And a report earlier this year by British  estate agent Knight Frank said the tax plans had sent French interest in luxury  London homes rocketing.

Inquiries from wealthy French for London  homes worth more than five million pounds soared by 30 per cent in the first  three months of this year, the statistics showed.

And interest in homes worth between one and  five million rose by 11 per cent, it was found.

Heading for the UK? London recruitment agencies that specialise in highly-paid banking jobs had seen a 51 per cent rise in applications from French jobseekersHeading for the UK? London recruitment agencies that  specialise in highly-paid banking jobs had seen a 51 per cent rise in  applications from French jobseekers

Liam Bailey, Knight Frank’s global head of  residential research, said: ‘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.’

Prime minister David Cameron angered the  French in June when he said he would ‘roll out the red carpet to wealthy French  citizens and firms who wanted move out and pay their taxes in  Britain.

He told the B20 business summit in Mexico:  ‘If the French go ahead with a 75 per cent top rate of tax we will roll out the  red carpet and welcome more French businesses to Britain and they can pay tax in  Britain and pay for our health service and schools and everything  else.’

The comments left one French politician so  offended he suggested Mr Cameron must have been ‘drunk’ when he made  them.

Gallic MP Claude Bartolone, a staunch ally of  President Hollande, said: ‘I hope that it was an after-dinner remark and that he  didn’t have all his wits about him when he said these things.’

France’s European Affairs Minister Bernard  Cazeneuve insisted there was no ‘exodus’, adding: ‘What I can answer to this  statement from the British prime minister is that French bosses are  patriots.

‘There is a range of measures we will take in  favour of business, measures that will support investment and encourage business  to stay in France.

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