Agents say rare properties are being listed for sale almost
weekly, creating buying opportunities for foreigners.
The tax changes slated for the 2013 budget by President Francois Hollande's Socialist government are having an effect on the Paris luxury property market before they have even passed into law.
Quite a few of France's most wealthy already have moved abroad to avoid the country's stiff inheritance and wealth taxes. Now, real estate agents say, the younger, working wealthy also are on the move, unhappy at the prospect of a 75 percent tax on income of more than EUR 1 million, or $1.28 million, and a capital gains tax of over 60 percent on stocks, bonds and company sales, although protests have produced exceptions for investors and new business start ups.
"In the last eight months since the measures were revealed, over 400 new residences, each worth above EUR 1 million, have come on the market as French entrepreneurs and investors leave France," said Charles-Marie Gottras, president of Daniel Feau, a high-end French real estate broker.
"We are seeing the kind of luxurious, high-quality properties that one used to see once a year or every six months now arrive on the market every week," he said.
The increased selection has altered the dynamics in a market that has long been characterized by high demand but little supply. Buyers now know they can negotiate, Mr. Gottras said, adding: "Prices have stabilized and even gone down a little." Some agents say there has been a 3 to 5 percent decline in top-end values.
As Alexander Kraft, chairman and chief executive of Sotheby's International Realty France, pointed out, "The fiscal changes are geared toward the seriously wealthy. The increase in numbers of residences for sale is not that significant, about 10 percent up, but in value it is very big. We are talking about exceptional properties starting at EUR 10 million to more than 20 to EUR 25 million."
"To give you an example, in the past six weeks alone, we have sold three properties for EUR 20 million each," Mr. Kraft said. "Even we don't usually sell those in a matter of weeks."
Some of these trophy holdings normally would not even appear on the open market, he said: "They would instead be carefully sold to friends or family members."
In the Sotheby's portfolio, a Haussmann-style, 19th-century mansion in the 16th arrondissement reflects the kind of rarefied home now on the market. "The 1,000-square-meter living space has been completely restored in exquisite taste with beautiful detailing. It's a real family home, cozy and comfortable, not a cold show property," Mr. Kraft said of the 10,760-square-foot home and its private garden. "The owner, a French industrialist, doesn't need to stay in France at this point in his life. The price, around EUR 20 million, is elevated, but it is such a rare find, I think it will sell."
Marie-Helene Lundgreen, director of Belles Demeures de France, an affiliate of Christie's International Real Estate and the international department of Daniel Feau, said the changes had created buying opportunities. "For those looking for very beautiful, important properties, this is the occasion to buy," she said.
Residences now on her books in the EUR 10 million to EUR 15 million range include a 330-square-meter, four-bedroom apartment
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