A leading real estate agency has revealed in a report that more than 400 €1million ($1.28 million) homes have been put on the market since France elected Socialist leader Francois Hollande as president. Are the rich fleeing the 75 percent super-tax?
Is this sign of an unintended consequence of the Socialist government’s economic policies in France?
The Daily Mail has discovered that the nation’s luxury real estate market has seen an influx of homes being put up for sale since the Socialists entered government in the spring. More than 400 €1million ($1.28 million) homes in Paris are on the market, which is more than double from a year ago in the same period.
Many are speculating that this is a sign the affluent in France are exiting the country. This is in part due to the president’s proposed 75 percent tax on individuals earning more than €1million ($1.28 million). A large number of people also fear higher taxes on sales of company shares and investing money overseas – the latest 2013 budget proposal includes an increase in the capital gains tax and a cap on deductions for large companies
“It's nearly a general panic. Some 400 to 500 residences worth more than €1million have come onto the Paris market since May,” said Daniel Feau, a Paris real estate agent, in an interview with the British newspaper. “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.”
The news report also found other indicators of a mass exodus of French citizens.
- British estate agent Sothebys sold more than 100 properties between April and June
- London recruitment agency Astbury Martin has a 51 percent increase in applications from French jobseekers.
- French inquiries for luxury London homes has soared by a total of 41 percent
- A new study found that 42 percent of French workers are willing to move to the United Kingdom
British Prime Minister David Cameron said at the B20 business summit in Mexico in June that he would be willing to roll out the red carpet for wealthy French businessmen who are willing to establish businesses in England and pay taxes for the country’s education and health care.
“If there is such a new tax rule, it’s going to be very, very difficult to attract talent to work in France, almost impossible – at a certain level, of course,” Jean-Paul Agon, CEO of L’Oreal, told the Financial Times last month.
The French leader has lost a lot of confidence from the electorate. A poll from early last month showed that his support dropped by 22 points within just four months down to 40 percent. Even former President Nicolas Sarkozy is mulling a run by telling a former colleague that things will be so bad that he will have to run for office again in five years.