Foreigners find luxury bargains in Paris as wealthy French flee taxes

When a €44 million (HK$462 million) Parisian townhouse near the Champs-Elysees was snapped up just six weeks after it was put on the block, Charles-Marie Jottras knew the city's luxury property market was turning around.

The chairman of broker Daniel Feau, an affiliate of Christie's International Real Estate, says the firm found a Qatari buyer for the 19th-century mansion, which features a dozen bedrooms on three floors, a terrace with a panoramic view of Paris, a swimming pool and a 1,000 square metre garden.

The re-emergence of buyers from the Middle East, the United States and Russia, together with a more than 10 per cent drop in prices in a year, is rekindling sales of multimillion-euro properties in the French capital. The market faced a glut after wealthy French people, including actor Gerard Depardieu, sought to offload properties as they left the country, fleeing Socialist President Francois Hollande's efforts to add to already high taxes.

"We really had 12 dreadful months between April 2012 and April 2013," Jottras said. "Then the market woke up nicely thanks to falling prices. Foreigners are looking at France anew because they've realised that, at the end of the day, the tax hell is for us, not for them."

While statistics show the number of apartment sales in the capital in the first half of this year was 22 per cent below the average of the past 10 years, such transactions rose 5 per cent in the second quarter from a year earlier.

Hollande unveiled €30 billion of new taxes for 2013 on companies and households - including asking employers to pay a 75 per cent tax on employees' earnings of more than €1 million - as he seeks to shrink a budget deficit that equalled 4.8 per cent of domestic product last year.