Tax Breaks for House Buyers in France Stalled

House buyers and recent homeowners in France are holding their breath. President Nicolas Sarkozy's pre-election promise to give house buyers a tax break has met its first hurdle and the project has just been rejected by the Assemblée Nationale. Modifications for an acceptable proposal are still being worked out.

As part of a larger "fiscal package" including a move to lift tax and social security fees on paid overtime, as well as ease inheritance tax, the move was intended to subsidize mortgage payments for house buyers for the first five years of their loan-if they signed the sales agreement after his election, on May 6. The measure has been rejected by the Assemblée as providing unequal advantages, benefiting those who can afford to buy rather than those still trying to get a foot on the property ladder. Measures to extend this subsidy retroactively to all homeowners in the first five years of repayments were also rejected.

The property market is not reflecting the positive mood in France, despite the clear signals that the government intends to help not hinder the economy. You may want to start looking now for that rural retreat in deepest France before any measures are approved and the prices start going up again with the increase in demand.

Best regards,

Maria Savage
International Living's European Consultant

P.S. One place on our radar for a rural retreat before prices rise is the leafy Limousin. Watch this space to find out more about this region where real estate bargains still abound.