French government raises threshold for wealth tax

Earlier this week (12th April 2011) French minister Francois Baron said that the French government aims to raise the threshold for households that have to pay wealth tax (ISF).

Under the proposed reforms the threshold for households for the wealth tax would rise to those with assets of more than €1.3 million compared with the current rate of €800,000.

Households with assets of between €1.3 million and €3 million would be subject to a tax of 0.25 percent and for assets over €3 million the tax would be 0.5 percent.

The proposed changes are likely to cost the government around €900 million and M Baron has indicated that they would like this to be covered by increases to taxes on inheritances of greater than €4 million. He has also talked about the possibility of an exit levy on tax exiles moving out of France, as well as a tax on French homes owned by non-residents.

Further details are expected to be announced after the next meeting of ministers on May 11th. The reform will go before parliament by June and some parts of it could take effect this tax year.

Source: Leggett Immobilier