Francois Hollande wants to reduced the waiting time to obtain an exemption from CGT on second homes from 30 to 22 years of ownership. Good news for home owners and the French real estate market, but there is still some mystery.

François Fillon decided in February 2012 to increase the application of CGT in France from 15 to 30 years to get a tax exemption for non-primary residences. President Francois Hollande backtracked this month. "We will not have to wait 30 years to be exempt from tax. We will bring it to 22 years"- said President, Capital guest on the show on M6 TV.

Following the decrease of property sales in France – down 12% to 709,000 transactions in 2012 and heading for another reduction of 8.5% to reach 600,000 this year, Mr Hollande said the previous Fillon government had made "a mistake" in increasing the limit for full CGT exemption from 15 years as a secondary property owner to 30 years.

The reform, which could be effective from 1st September 2013, would be accompanied by a "special deduction for 2014?. A news judged positive by professionals, but still leaves much mystery.

A measure that could unlock the market
The transition from 30 to 22 years was a measure that Hollande was committed to from his election. This is great news, since this waiting period is partly responsible for slowing down the market. Nowadays, many owners of holiday properties in France give up putting their property on the market or prefer to wait for a better time like the next elections which are due in 2017. His application, which could occur as early as September 2013 – three months after the announcement – is also good news. This will have an immediate effect because it takes 3 to 4 months to finalise the sale of a home in France so that current sales will be involved straight away giving more confidence for French sellers to put their properties on the market.

This measure should give a small boost to the French estate market until the end of 2013 and owners who were hesitating to sell their holiday home or BTL in France should benefit from this occasion. For buyers who were hesitating to purchase this is also a good opportunity because there will be more choice on the market and at reasonable prices in order to have quick sales. According to Sextant Private finance, French mortgages are also at historic low levels which is a good way to protect against currency fluctuations over a long period with small monthly payments.

The full article about the new French CGT measure can be found here