Monday, September 12, 2011

Curious side effects of new CGT rules....

Following the French government's recent announcements (see below) on the changes in CGT applied to second homes, the estate agency group Century21 has stated that it received 500 cancellations of compromis de vente (pre-sale contract) and 1,500 cancellations of sales mandates (instructions to sell) from their clients within hours of the original announcement. The figures represent some 5% of their usual 75,000 annual property transactions.

Overall, sales of second homes represent just 7% of the French property market, although in most coastal/tourist areas - where the percentage of second homes can be as high as 80% of the local housing stock - the figure can be much higher. Nationally sales of second homes account for around 56,000 transactions annually our of a total 700,000 to 800,000 changes of property ownership.