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All the news concerning real estate

During his campaign, Emmanuel Macron had announced his desire, not to completely remove the ISF (solidarity tax on wealth), but to turn it into a tax on real estate rental profit. The idea? Create a property wealth tax (IFI). A will confirmed by the government, which intends to integrate this new tax into the 2018 budget bill.
What is it and who will be liable for this new tax? De Cordier Immobilier explains it:
 
What is the IFI?
 
In concrete terms, this project involves taking financial investments, savings and property values out of the ISF in order to keep only property values. Cars, jewelery, furniture and other life insurances will no longer be taken into account in the net taxable assets.
 
Only real estate assets offering a real estate rental profit to their owners will therefore be taken into account.
 
Who will be liable to pay the IFI?
 
As for the ISF, a scale should be put in place. Looking at the solidarity tax on wealth, it shall be divided into 6 parts. Tax rates will range from 0.50 to 1.50%. As for the threshold at which this tax would be imposed, it would also be identical to that of the ISF, namely net taxable real estate assets greater than 1.3 million euros.
 
The 30% deduction on the principal residence should also be maintained. The cap at 75% of income should be also, like the ISF-donation to deduct 75% of donations to associations and within the limit of 50 000 euros tax reduction. However, this should not be the case for the ISF-SME which allowed to benefit from a tax reduction equivalent to 50% of their investments in small French companies.
 
The impact of the IFI on the taxpayer
 
Taxpayers subject to the ISF will come out great winners. The amount of their tax, with the exception of those with only real estate assets, which is something more and more rare, will be substantially reduced.
 
What consequences for the real estate ?
 
The introduction of this new tax is not expected to have any impact on the primary residences market, in particular by maintaining the 30% deduction.
Some, whose real estate wealth is important, will undoubtedly be tempted to reduce this wealth in order to invest in untaxed investments. It is therefore safe to bet that the real estate market is moving as soon as this new regulation comes into place. More properties should be put on the market and they could then become more accessible. Hoping for a price reduction in the real estate, in the Chablais or elsewhere ...
 
Who will benefit for real estate housing investments with the IFI?
It is unclear whether residential real estate investments, acquired for example in Pinel law or in Censi-Bouvard (student residences, EHPAD), will benefit from an exemption. Similarly, the fate of REITs (Civil Real Estate Investment Companies) remains unclear. It is, however, quite possible that the paper stone has also come out of the new real estate tax.
 
The Minister of Action and Public Accounts Gerald Darmarin was keen to be reassuring on the subject, promising that real estate considered productive, namely those who "participate in productive life, also participate in the economy" will not be subject to this tax. Now, let’s see what will be considered as real estate participating in the real economy?
 
When will the IFI come into effect?
 
For the time being, it is still unclear when the IFI will be set up. But it will appear in the draft budget 2018 whose presentation is scheduled for September 27, confirmed by Gérald Damarin. The government hopes to start the tax on real estate fortune next year.
 
However, it is safe to bet that the Constitutional Council is seized by parliamentarians following the presentation of this project, which, if it aims to bring back the taxed exiles to France, will represent a huge shortfall for the state.The ISF should indeed disappear in the upcoming months, to be replaced by a tax on real estate wealth. Update on this new tax.LDuring his campaign, Emmanuel Macron had announced his desire, not to completely remove the ISF (solidarity tax on wealth), but to turn it into a tax on real estate rental profit. The idea? Create a property wealth tax (IFI). A will confirmed by the government, which intends to integrate this new tax into the 2018 budget bill.
What is it and who will be liable for this new tax? De Cordier Immobilier explains it:
 
What is the IFI?
 
In concrete terms, this project involves taking financial investments, savings and property values out of the ISF in order to keep only property values. Cars, jewelery, furniture and other life insurances will no longer be taken into account in the net taxable assets.
 
Only real estate assets offering a real estate rental profit to their owners will therefore be taken into account.
 
Who will be liable to pay the IFI?
 
As for the ISF, a scale should be put in place. Looking at the solidarity tax on wealth, it shall be divided into 6 parts. Tax rates will range from 0.50 to 1.50%. As for the threshold at which this tax would be imposed, it would also be identical to that of the ISF, namely net taxable real estate assets greater than 1.3 million euros.
 
The 30% deduction on the principal residence should also be maintained. The cap at 75% of income should be also, like the ISF-donation to deduct 75% of donations to associations and within the limit of 50 000 euros tax reduction. However, this should not be the case for the ISF-SME which allowed to benefit from a tax reduction equivalent to 50% of their investments in small French companies.
 
The impact of the IFI on the taxpayer
 
Taxpayers subject to the ISF will come out great winners. The amount of their tax, with the exception of those with only real estate assets, which is something more and more rare, will be substantially reduced.
 
What consequences for the real estate ?
 
The introduction of this new tax is not expected to have any impact on the primary residences market, in particular by maintaining the 30% deduction.
Some, whose real estate wealth is important, will undoubtedly be tempted to reduce this wealth in order to invest in untaxed investments. It is therefore safe to bet that the real estate market is moving as soon as this new regulation comes into place. More properties should be put on the market and they could then become more accessible. Hoping for a price reduction in the real estate, in the Chablais or elsewhere ...
 
Who will benefit for real estate housing investments with the IFI?
It is unclear whether residential real estate investments, acquired for example in Pinel law or in Censi-Bouvard (student residences, EHPAD), will benefit from an exemption. Similarly, the fate of REITs (Civil Real Estate Investment Companies) remains unclear. It is, however, quite possible that the paper stone has also come out of the new real estate tax.
 
The Minister of Action and Public Accounts Gerald Darmarin was keen to be reassuring on the subject, promising that real estate considered productive, namely those who "participate in productive life, also participate in the economy" will not be subject to this tax. Now, let’s see what will be considered as real estate participating in the real economy?
 
When will the IFI come into effect?
 
For the time being, it is still unclear when the IFI will be set up. But it will appear in the draft budget 2018 whose presentation is scheduled for September 27, confirmed by Gérald Damarin. The government hopes to start the tax on real estate fortune next year.
 
However, it is safe to bet that the Constitutional Council is seized by parliamentarians following the presentation of this project, which, if it aims to bring back the taxed exiles to France, will represent a huge shortfall for the state.