New 2018 amendments to French Wealth Tax are good news for those planning to move to the country as they allow for more profitable investments worlwide
Last year French president Emmanuel Macron announced his intentions to upgrade France’s controversial and pretty harsh wealth tax in an attempt to attract investment and create a more business-friendly environment in the country.The beginning of 2018 was marked by noticeable changes introduced to the existing wealth tax regulations.
In fact, a new 2018 amendment to the existing French wealth tax is more an abolition than an update. The wealth tax as we knew it is literally gone leaving in its place tax regulations that can be classed as a luxury property tax. Consequently, expats resident in France can save significant amounts of cash in tax payments.
Previously French residents with worldwide assets and property worth over €1.3 million were charged l’impôt sur la fortune – ISF (a wealth tax) at a rate up to 1.5%. The new property tax will be applicable solely to French residents’ worldwide property exempting other financial assets such as savings, investments, securities, etc.
The new tax regulations open up huge financial opportunities for French residents with considerable non-property investments around the world.
It is also anticipated that the move will attract more wealthy expats to relocate to France and, probably, will encourage French entrepreneurs and wealthy individuals who left the country to escape the burden of the wealth tax to come back.
Property owners and property investors are less lucky. The new property tax applies the same thresholds as the previous wealth tax. Property worth €1.3million or more will be taxed at a 0.5% tax rate on the equity above €800,000. For example, if an investor owns a €1.3million property, and has €900,000 equity in it, they will pay 0.5% tax on the €100,000 above €800,000.
The new tax regulations mean that with careful mortgage planning, equity control and using non-property investments expats resident in France can bring down their tax liabilities and invest more profitably globally.
