Building a portfolio of leasebacks in France has always carried the drawback of taking you into the Wealth Tax bracket.
Introduced by the Socialist Party in 1981, the wealth tax is paid by those with total assets worth more than €790,000 (£672,100), regardless of their income.
In a television interview last week President Sarkozy said that he wanted to abandon the solidarity tax on wealth, one of the last remaining wealth taxes in Europe, to bring the French fiscal regime into line with Germany.
The bottom rate for the current wealth tax, which is levied annually, is 0.55% of the net worth of household assets, while the top rate is 1.8%. Those in the lowest band, with assets valued between €790,000 (£674,000) and €1.29m (£1m), pay up to €2,750 (£2,346) a year. Those in the highest band, with assets valued at more than €16.54m (£14m) pay at least €221,120 (£188,700).
A total of 562,000 households are expected to pay around €3.29bn (£2.8bn) of wealth tax to the French treasury this year.
I've been saying for some time that conditions have never been better for building a portfolio of French leasebacks, with mortgage rates at their lowest since the French revolution. Looks like the the situation just got even better...
Best wishes
Graham
020 8940 7000