French property prices could rise due to tax changes Article Published: 13:34 09/09/2007 Article Classification: France
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French property likely to rise

President Nicolas Sarkozy is offering tax relief worth up to 20% of the interest during the first five years of new mortgages taken out by French residents. This limited to €3,750 a year for a single person, but is not subject to means testing. There are also proposals in future to cover existing loans.

But British buyers could also benefit from a potential knock-on rise in French property prices. French property is already potentially lucrative for leaseback investors, who can benefit from VAT refunds and guaranteed rental, and this new incentive makes it even more attractive.

Financial experts believe that the new mortgage measures will give a kick-start to French property, allowing for first-time buyers to afford homes. This, in turn, will stimulate more interest in higher-priced properties.