Seminar on French real estate tax developments: January 30, 2008 at PricewaterhouseCoopers
The International Real Estate Tax Group within PricewaterhouseCoopers LLP organized a successful two-hour breakfast seminar on "Real Estate Tax Developments in France" in New York on January 30, 2008. The seminar was presented by Bruno Lunghi, Anne-Caroline Descat (both Real Estate Tax, Paris) and Bart Kruijssen (International Real Estate Tax, New York). The seminar attracted financial and tax people within large real estate players in the US. We have received overwhelming responses and much positive feedback from our attendees.
Items of interest that were discussed included intermediate holding structures in general, common structures used for investments in French real estate assets, the new provisions on French 3% tax and an update on French regulated vehicles (OPCI and SIIC). In addition, the features of the sophisticated Real Estate Calculation Models (RECMs) were demonstrated. These RECMs are a tool to precisely trace (inter-company) cash flows and see where, when and how much tax leaks from a certain contemplated or chosen structure.
Some conclusions which were drawn at the seminar: Looking at the common structures used for French investments, it appears that having French real estate held by a Danish property company is the most tax efficient route, however, this structure will only hold until January 1, 2009. The second best efficient structure is the double French route - using a French SAS on top of a French tax transparent SCI. In certain scenarios capital gains may be exempt in both Luxembourg and France. The OPCI seems to a very interesting regime to manage the French tax position and this is the right time to start thinking about using it in a French investment structure. Finally, in practice it appears that the French 3% tax is more an issue from a business perspective than from a tax leakage perspective as it is often played out in purchase and sale negotiations.
For more information or to arrange a meeting to discuss matters further, contact:
Bart Kruijssen in New York
tel: +1 646 471 5178
Bruno Lunghi in Paris
tel: +33 1 5657 8279
