Riviera a perennial draw for overseas buyers
How about this for an apparent contradiction. France's wealthy elite are threatening to leave their homeland, because President Francois Hollande wants to tax them more heavily, but high-end estate agents are flocking to the rich person's playground of the Cote d'Azur in anticipation of increased demand for homes there from multi-millionaires.
Hollande's tax rises planned for 2013 include a 75 per cent rate of tax on incomes in excess of €1 million (HK$9.96 million), and a one-off wealth tax of up to 1.8 per cent on home-owners whose equity in their properties exceeds €1.3 million.
These levies come on top of increased capital gains taxes on property sales imposed by Hollande's predecessor, Nicolas Sarkosy, in February 2012.
Despite Sarkosy's tax rises and knowledge of Hollande's intentions, four international estate agencies specialising in luxury properties expanded their operations on the French Riviera during the summer.
Savills, Chesterton Humberts, Knight Frank and Christies International Real Estate have either opened new offices, bought local Riviera agencies, formed new affiliations or strengthened existing ties with local agencies on the Cote d'Azur.
So, why are these estate agents arriving at a time when wealthy French are leaving?
Well, rich French people are only one part of their target market. Estate agents' sights are set mainly on overseas buyers, including
- BRIC nationals who want to spend their newly acquired wealth on swanky foreign homes,
- Middle East nationals looking for somewhere safe to put their money while the Arab Spring turns into a winter of discontent in their home region, and
- Britons and other north Europeans who are returning to the market attracted by a 25 per cent reduction in property prices since the Lehman Brothers debacle in 2008.
Unlike their French counterparts, these incomers are unaffected by higher income taxes and feel able to afford higher property taxes.
Sun, sea and French culture are a perennial draw.