Super rich French turn to London

Super rich French residents are turning to the London property market amongst fears over rising taxes after current elections.

Francois Hollande,  the presidential candidate who is a favourite and in the lead, is proposing a tax rate of 75% for those earning above €1,000,000.

Central London has seen an overall drop of 9% in enquiries for properties from other European counterparts. However, Knight Frank has reported a 19% increase in interest from French buyers in the first 3 months of 2012.

Liam Bailey, the global head of residential research at Knight Frank believes that the proposed tax increases in France is already having an impact with evidence pointing to a surge in online activity from the country. Evidence shows that searches for properties under £1,000,000 have dropped, suggesting that only the very wealthy are searching for central London homes. On the contrary, searches for central London homes made in France between £1-5 million were up 11% and from £5 million upwards a staggering 30% spike. This research further highlights how out of reach property in the central London market is becoming when prices are this high.

The popularity for overseas residents to invest in London property lies in the fact that there is no tax set up them if they are ‘non-domicilied’ unless they have been resident in the country for over seven years. Many foreigners have therefore set up London as their new home with a ‘non-domiciled’ status in order to avoid taxes in their own country and with the ability to also avoid taxes in the UK for seven years.

Image: flickr / rollercoasterphilosophy