Two changes to France’s tax system due to come into force next year could at the same time encourage more Brits to become resident there and stimulate property sales.

Firstly, France is increasing the threshold at which residents pay wealth tax (“L’Impôt de Solidarité sur la Fortune”, or ISF) from €800,000 to €1.3 million. Wealth tax does not exist in the UK and is a tax on total worldwide assets.

The second change affects France’s capital gains tax rates. Under the current regime, after five years of ownership non-resident property-owners benefit from a 10% per year allowance on the rate of CGT tax levied (19%) and after 15 years of ownership the property is exempt of CGT altogether.

The new system will scrap the 10% reduction and 15-year exemption rules and instead CGT will remain at the same rate throughout ownership but vendors will be able to offset inflation against their capital gain. This way owners won’t be encouraged to wait 15 years before selling a property and could be encouraged to put a property on the market earlier than under the old tax regime.

UK-based second homeowners should remember they are likely to still be liable for any gains in the UK.

To understand the full step-by-step process to buying a property in France, collect The Overseas Guides Company’s ‘France Property Buying Guide’