Huge amounts of foreign investment are expected to flow into the French property market following the introduction of the country’s first trust law.
The new legislation could allow foreign pension trustees to invest in French leaseback property for the first time, as well as encouraging high net worth individuals to move offshore funds into the French property market without major tax penalties.
Before the law came into effect on 2nd March, France did not recognise the concept of a trust or fiducie. Trusts are commonly used in other countries as a tax-efficient way of investing in property.
Many high net worth individuals with offshore funds will be focusing on trophy properties and asset classes that are truly unique for France, such as vineyards and ski chalets, as well as prime agricultural land. There will also be interest in sough-after prime residential areas along Cote d’Azur as well as central Paris.
In addition to passing the trust law, France has also signed tax information exchange agreements with a number of tax havens including Jersey, Guernsey, the Isle of Man, the British Virgin Islands and the Cayman Islands.
The 3% gross annual tax penalty and the absence of a trust law were two major obstacles for foreign investors so it is an outstanding property investment opportunity.
View property investment opportunities in France at International Luxury Real Estate
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