Photo: Flickr via fabiovenni
The French electorate may have voted Francois Hollande to power in the French presidential elections, but there is one group of people that no longer seem to feel welcome in the country now that he’s in power: the rich.According to Knight Frank, a London-based real estate agent, online inquiries by French users about prime properties in central London increased by 68 per cent in February, when Hollande announced his 75 per cent tax on those earning more than €1 million ($1.3 million). And in the months leading up to April, the inquiries for properties worth more than £5 million ($8 million) increased by 30 per cent.
The upward trend has been seen by other realtors in London’s other expensive districts like South Kensington and Chelsea as well, according to The Telegraph.
“Seen from abroad, France is the last country where an entrepreneur wants to go,” Marc Simoncini, founder of French dating site Meetic.com, said on BFM TV, according to The Local.
And while Switzerland and Belgium have been welcoming of wealthy French expats as well, London — often dubbed “the 21st arrondissment (suburb) of Paris” — could be the preferred destination for most for a number of reasons…
They fear a tax increase in France while the UK is reducing the tax burden
New President Hollande not only wants to implement a 75 per cent tax rate on earnings over €1 million ($1.3 million), but also a 45 per cent rate on those making €150,000 ($191,000) or more. He is also expected to raise taxes on property assets and end Sarkozy’s tax incentives.
The move would affect between 10,000 and 20,000 households if approved by the constitutional council, according to estimates by the tax-collectors’ union, SNUI.
On the other hand, the UK is cutting the 50 per cent tax rate for annual income above £150,000 ($242,500) to 45 per cent. Its top capital-gains rate is 28 per cent and there’s no wealth tax, according to Bloomberg BusinessWeek.
They’re looking for a safer haven from the euro crisis
After Hollande publicly admitted to wanting to renegotiate the austerity pact backed by Germany, many are worried the eurozone is in for more turmoil. Which is where London comes in. According to The Telegraph, foreign money has been pouring into prime central sites in London, as people try to protect their wealth amid economic uncertainty.
They feel unwelcome and stigmatised in France
When your own president says “I don’t like the rich,” it’s hard to not feel nervous.
Jeremie Le Febvre, the 30-year-old founder of private equity marketing-services firm TBG Capital Advisors, told Bloomberg why he was leaving France (albeit moving to Singapore):
“What’s really driving my departure is the fact that I don’t share the values that emerged during the election, the rejection of ambition and success,” he said in an interview. “It’s part of France’s difficult relationship with money, but it has reached a new level. Even if it’s utopian, I need to believe for me and my descendants that the sky is the limit.”
Stéphane Rambosson, managing partner at consultants Veni Partners, says Hollande’s arrival is ominous for business. “Sarkozy had implemented reduction in social changes to increase competitiveness in France. Such changes will disappear and labour costs, which are huge, are likely to rise,” he told The Telegraph.
Which compares rather poorly with London Mayor Boris Johnson’s rallying cry of “Bienvenue à Londres”, made earlier this year as France embraced the financial transaction tax, rejected by the UK.
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