Wealth Tax

[Sprogster]

Most members probably do not see French wealth tax as an issue that affects them. However, with escalating property values that could change in the future.

French wealth tax has become more controversial, as changes to it have removed any consideration as to a tax payers ability to pay. As when the tax was introduced, there was an override that the liability could not exceed 85% of the taxpayers income.

Therefore, if you are capital rich but income poor you have a problem. Many will say then sell your some of your assets.

However, if you are a Bretagne farmer with land near the coast or popular tourist areas, then you could find escalating land values bringing you well into the wealth tax net. But without the income to pay it.

The same consideration applies to retirees or anyone who lives on a limited income, but have found the value of their home/gites escalate over the years.

The French rich just move to Belgium and Luxembourg to avoid it. Therefore, increasingly the burden is falling on individuals it was never intended to catch.

 

 

[BJSLIV]

Therefore, if you are capital rich but income poor you have a problem

That is why the Governemnt are making some changes to the rules. From next year the maximum that an individual will have to pay for the combined   impôt sur le revenu, ISF, taxe d'habitation et taxe foncière will be limited to 60% of their total income.

 On a related subject the effect of abolishing the 20% abatement that has previously been applied to one's income, and the ending of the 48% tax band will mean there will be some winners and losers when the 2007 tax bills come out!.

Letters to M Villepin.