Money Makes You Lose Your Head…in France

While I write about ways to MAKE money, earn PROFITS on your investments in France and get a good ROI, the French are finding ways for you to LOSE money, PAY more taxes and deplete your profits. From our entrepreneurial American point of view, this makes no sense at all.

An old friend and longtime American writer in Paris, Harriet Welty Rochefort, who is the author of “French Toast” and “French Fried” devotes a full page of her Web site on an explanation of the French attitude toward money — that is contrary to an American’s in just about every way. Rochefort’s article is very insightful and is worth a read: (Understand France). She notes that the French Franc, which was replaced by the Euro in 2002, was created in 1360 by King Jean II “le Bon” (“the Valiant” although he wasn’t valiant at all) and the word “franc” means “free” because it helped ‘free’ him for a huge ransom! Her article ends with this statement: “The French simply don’t want anyone to make money.”

I had to read the news several times and on several sites to believe that the tax would be imposed on properties LESS than 13 square meters. That’ smaller than the average bedroom — so who lives in such small spaces? You got it right — students.

According to the French Secretary of State, Benoist Apparu, the average rental price per square meter in Paris is 23€ and they estimate that about 50,000 apartments in Paris would be affected by the tax at a rate of 10% to 40%. Other areas of the country that could be affected include the French Riviera.

But, while they are so worried about the landlords making too much profit off of students, I can assure you that the average per square meter COST of such a property is also much higher than larger properties. So, in effect, the landlord is likely to LOSE money on his investment, rather than make excessive profits.

In an outlook on housing markets on the Web site Stock Markets Review, it opens with “Being wealthy is good, living in the most attractive city is even better. Paris, New York or London? What is the best city for great fortunes?”

Fortunately for the French, the rest of the world doesn’t have their same distaste for money. According to their analysis, one big reason for Paris’ property value increase of more than 20% is thanks to foreign investors who view Paris as one of the world’s safest investments. According to the Chambre de Notaires de Paris, one out of every two buyers in Le Marais is Italian.

London is the next sure investment even though prices are about 20% higher than Paris. New York is a little less expensive than London, but values change depending on currency rate fluctuations in comparison to the euro or the sterling. The conclusion for Stock Markets Review was that “Paris is still the safest city for long term investment regardless of currency fluctuations. London can emerge as an alternative but less so in the aim of surplus value. If the objective is to achieve the best deal, then New York is undoubtedly the best choice even if the city does not have the same charm as Paris.”

It’s just a shame that because the French ‘lose their heads’ when they think or talk about money, that they don’t wish to take advantage of their own good fortune…while the non-French who agree that “Being wealthy is good, living in the most attractive city is even better”…are. Just look at what happened to Marie Antoinette?

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected]

 P.S. The property world is back to business. The sellers are back, the agents are back and we are back. With low season rates on air fares and apartment rentals, this is a perfect time to make your dream come true to invest in France. If you have an inkling to make 2012 your year to ‘take the leap’ into property ownership, email us your deepest dreams and desires at [email protected] and together let’s see how we can be of help.