France and Hong Kong signed an agreement on the abolition of double tax on real estate

French property becomes more attractive to foreign investors. At the end of October after nearly a decade of negotiations, the financial Secretary of Hong Kong John Tsang (John Tsang) and French economy Minister Christine Lagarde (Christine Lagarde) has signed a long-awaited agreement on the abolition of double the tax rate when buying property.

The Treaty aims to prevent double taxation of individuals and companies owning real estate in both countries. It encourages mutual investment Hong Kong and France.

Informed private individuals and legal entities of Hong Kong, engaged in commercial activities in France and French companies with businesses in Hong Kong were forced to pay tax to both countries. Now they will be taxed only once.

It’s already the 15th such agreement concluded by Hong Kong with partner countries, including China, Luxembourg, Belgium, the Netherlands, Liechtenstein, Austria, Ireland and the UK.

Especially the warmth of the new agreement met a real estate Agency in France. Before signing the agreement the Hong Kong investors, many of whom live in France permanently, were forced to annually pay 3% of the value of its second real estate. Now they will be able to avoid such significant costs.

David Anderson (David Anderson), a tax expert at law firm Sykes, says the situation on the market: “the Elimination of double taxation provides a “green light” to investors from Hong Kong, so soon we can expect a wave of investment from Hong Kong to France”.

Nick Leach (Nick Leach), head of the investment branch of the French travel agencies Pierre & Vacances, is also expecting an unprecedented flow of investment: “the Hong Kong property market is one of the most important to us along with Dubai and Singapore. Wealthy bankers and lawyers of Hong Kong are often looking for investment opportunities in France. Very popular among them is the real estate of Paris and Alpine regions. Now, when the tax barrier is removed, we expect a significant increase in interest from Hong Kong investment community.”

John Busby (John Busby), the head of a major French mortgage company Athena Mortgages, also expects a surge of interest to Hong Kong investors. “We have seen a similar surge of interest from investors and realtors channel Islands when in the beginning of this year, France has signed similar tax treaties with these territories,” he explains.

The agreement on cancellation of double taxation, expected to take effect in 2011.

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