Tag Archives: gains
France To Cut Minimum Property Holding For Capital Gains Relief
22 August 2013 The French government is to increase capital gains tax relief on investment properties and second homes, shortening the exemption minimum holding period to 22 years from 30. Along with a temporary 25% cut in capital gains tax over the next year, the move is intended to increase the supply of available housing. Gains on investment properties and second homes are subject to a 19% tax rate, with an additional tax of 2%-6% on gains of more than €50,000. From September taxable gains will be reduced by 6% a year after five years of ownership and by 4% in the 22nd year, leading to total exemption after 22 years compared with 30 years previously. However, gains will still be subject to social charges of 15.5% for 30 years. The base for these charges will be discounted by 1.65% a year between six and 21 years of ownership, 1.60% in the 22nd year and 9% a year thereafter. The base for both capital gains tax and social charges will also both be reduced by an exceptional 25% relief between September 2013 and August 2014. The reform is intended to “make the property market more fluid, support activity in the housing renovation sector and lead to a decline in prices that will help first-time buyers and tenants”, the Budget Ministry said. The 25% additional relief is designed to lead to a positive “supply shock” in the short term and ensure that the longer-term reform gets off to a solid start. The previous centre-right government reduced capital gains tax relief on the sale of second homes and rental properties, increasing the period of ownership needed for full exemption from the tax from 15 to 30 years, but this led to a drying up of sales. The new reform will be the third overhaul of the regime since 2004, whereas property investors need more stability in taxation, because of the long-term nature of their investments, said Victor Pagès, founder of My US Investment. Meanwhile, for undeveloped land the government is planning to abolish capital gains tax reliefs for longer periods of ownership, to encourage the sale of vacant land for housebuilding. The moves will be included in the 2014 budget. pie Continue reading
Returns On US Timberland Hit Highest Since 2008
Returns on US forestry hit their highest since the global economic crisis, and are poised for further gains, despite setbacks to hopes for housebuilding, a key destination for lumber. A timberland index compiled by National Council of Real Estate Investment Fiduciaries showed returns of 9.36% in the year to the end of June, the highest figure since autumn 2008, as the world was falling into slump. The figure, of which income accounted for 2.71 points and capital appreciation for 6.51%, came against a backdrop of disappointment for the domestic property market, slowed by rising borrowing costs. “The second quarter rise in US interest rates and the 9% drop in overall US housing starts triggered a slight downward adjustment in forecasts for housing demand for the remainder of 2013,” the council said. Shares in DR Horton and PulteGroup tumbled on Thursday after both housebuilders reported slowdowns in sales growth, fuelling fears over the impact of raised interest rates on the sector. DR Horton said that its new house orders rose 12%, year on year, in the latest quarter, below Wall Street expectations of a 28% figure, and the 34% the group achieved in the previous period. PulteGroup orders fell 12% in the quarter, compared with Wall Street forecasts of 4% growth. ‘Growth ahead’ However, Ncreif said that “expectations are still on track for housing starts to climb north of 950,000 starts for 2013, a strong improvement after 2012’s 780,000 starts. “As the economy and housing markets continue to improve, the timber fund index should continue to see positive results.” The returns from timberland are well below those of 20.0% from farmland over the past year, but unlike agricultural property is on a rising annual trend, on Ncreif data. The disappointing domestic housebuilding conditions contrast with buoyant export demand, which drove log prices in the US Pacific North West up 10% in the April-to-June period. Chicago lumber futures tumbled by 24% over the quarter. Weyerhaeuser profits rise The data came as Weyerhaeuser, the US timber giant, reported a quadrupling to $196m in underlying earnings for the April-to-June quarter, on revenues up 19.4% at $2.14bn, growth it attributed largely to the “improving housing market”. Earnings per share reached $0.35, ahead of Wall Street forecasts of a $0.29-a-share result. Weyerhaeuser shares edged 0.3% higher to $52.85 in early deals in New York. Continue reading
