A gradual recovery in European residential markets appears to be underway, spurred on by the interest rate cut decided by the ECB in June. The forecast is for six successive cuts, with the key rate set to fall to 3.25% by the end of 2024 and to 2.25% by the end of 2025. This trend could encourage foreign buyers if the euro depreciates. In Italy, for example, the doubling of the flat-rate tax from €100,000 to €200,000 could paradoxically boost the country’s attractiveness by offering tax clarity in an uncertain European context.
In France, President Emmanuel Macron has delayed the appointment of a Prime Minister until after the Paralympics, fuelling speculation about possible tax reforms, including wealth tax. In the UK, adjustments to capital gains tax are expected in the Autumn Statement of 30 October 2024.
In conclusion, a number of factors affecting European residential markets are currently in motion and are likely to have an impact over the coming weeks.
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