French wealthy planning to flee France’s high taxes

By Marilyn Z. Tomlins

Switzerland has always meant much more to the wealthy of France than small squares of chocolate wrapped in pretty paper. Switzerland was where they banked, illegal as it was, and where they went to live to escape France’s high taxes and, as they said, the personal insecurity of living in France.

Therefore, France’s movie and sports ‘stars’, as well as her most successful writers, could be found living in and around the French-speaking city of Geneva or in the French-speaking Canton of Geneva. There lived singer Charles Aznavour, Sacha Distel, Formula One ace Alain Prost, champion rally driver Sébastian Loeb,  and tennis players Yannick Noah, Guy Forget and Jo-Wilfried Tsonga, the current Wimbledon men’s semi finalist. And, but for Sacha Distel, who is no longer alive, they still do.

Now, France having become a socialist state under François Hollande and he, having decided to tax anyone resident in France who declares an annual income of €1 million or more, by 75%, more of the countries wealthy are knocking on the doors of Geneva’s real estate agencies. (€1 million / $1.2 million)

All are looking for properties to buy because they are refusing to give Hollande, who actually said, “I do not like the rich” during his campaign for the presidency, 75% of their earnings each year. Hollande assumed office as France’s 24th President on May 18 this year of 2012.

So what is the French buying?

Jérôme Félicité, head of the Geneva-based real estate company, Genrofinance-Dunand, revealed that the agency has had visits from two dozen French residents in the period June/July alone who wanted to buy properties. He did not name names of course, but he said that they were either businessmen who were also going to move their businesses to Switzerland, or people who had retired and wanted to protect their savings.

“The Geneva city center is only half an hour from the airport and it is just an hour’s flight to Paris,” he said.

What do the properties cost that these prospective buyers are looking at?

They cost between $3 and $8 million each.

For example, half an hour drive along the Geneva (Leman) lake there are 15 apartments on the market. The apartments are between 1,560 sq.ft. and 8,600 sq.ft. in size at an asking price of  $2,140 per sq. ft.

What you will get for your money includes your personal secure parking bay big enough for four cars, the use of a swimming pool, spa, a fitness room and a private beach on the lake.

Another property is a ranch of half an acre on the heights above the lake. There is a 9,256 sq. ft. mansion on the grounds.  The price is $8,605,100.  For that kind of money your neighbors will be Guy Forget, Jo-Wilfried Tsonga and Sébastian Loeb.

Before Hollande had decided on the 75% tax of the wealthy (an annual income of €1 million and more and you are indeed wealthy in France) in other words during the presidency of his predecessors one of them Nicolas Sarkozy, 750 French nationals had already made the move to Switzerland. All that the Swiss demanded from them was their money in Swiss banks and that they were resident in Switzerland for a minimum of 180 days each year.

The Swiss, of course, also provide bank secrecy.

In France revenue tax rates are as follows:

Earning up to €5,963 ($7,311)     – 0%
Between $7,311 –$14,586           – 5.5%
Between $14,586  – $32,396        – 14%
Between $32,396 – $86,851         – 30%
Over  $86,851                               – 41%

In addition, someone with an annual income which includes income from capital of between $306,550 and $613,100 must pay a special tax (taxe sur les hauts revenus) of 3%. For those with an annual income of more than $613,100 the special tax rises to 4%.

The average annual income of a household in France is less than $23,297. The poverty line for a couple with one child is $2,084 per month, but half of the country’s households, this includes a couple with one child, have an income of $1,839 per month. A household with $3,680 per month, which is 10% of the population, is considered wealthy.

Latest official statistics (2011) show that France’s population stands at 65,436,552.

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