2018 has been rich in events in the fields of economics, finance and the stock market. Introduction of flat tax and withholding tax, return of volatility on the stock markets or further increase in real estate prices …
Real estate: price increase and attractiveness for scpi
According to the figures of LPI-SeLoger of 03/12/2018, real estate prices increased by 3.7% on average over the year, a more sustained increase than that of the previous year. However, the gaps are relatively large in large cities. Over the year as a whole, real estate prices should decline in Mulhouse, Amiens and Brest, for example, while they should increase notably in Paris (7%) and Lyon (8%).
The paper-stone also continues to seduce the French. The SCPI market remained dynamic during the last semester. At the end of Q3 2018, the threshold of 50 billion cap was exceeded, a threefold increase in just ten years. If this asset class is as popular it is because the “stone” reassures the French and because the SCPI provide investors with an average return of 4.5% net of fees in 2017 according to the SPAMI.
Volatility of return on the stock market
2017 was a good year for global financial markets. Most countries posted robust growth, which translated into strong performance in the equity markets. But volatility made its big return on the stock market in early 2018, after a long period of calm. This volatility has generated many uncertainties: a possible return of protectionist temptations, geopolitical tensions and disruptions in the oil market.
Natixis Investment Managers has published the results of its annual global survey of 9,100 individual investors from 25 countries in Asia, Europe (including 400 in France), the Americas and the Middle East. Results show that the majority of global investors are concerned that market volatility will hinder the achievement of their investment objectives, pushing them to take a more defensive approach to portfolio construction. They put more emphasis on risk, without giving up on performance. They also seem to favor active management, but still have misconceptions about passive management. Finally, the majority of respondents want to make sense of their savings and integrate ESG criteria into their investments.
In 2018, many investors mentioned the bursting of the cryptocurrency bubble and more particularly Bitcoin. In January, the total capitalization of crypto-assets amounted to nearly 830 billion dollars, according to the website Coinmarketcap.
Since then, some virtual currencies have lost more than 90% of their value. As for Bitcoin, it has fallen by more than 80% since its highest level in December 2017. Among the many reasons that may explain the bursting of this bubble, there is the growing involvement of governments to regulate this sector, numerous prudential incentives issued by regulators, including the Autorité des marchés financiers and the piracy of many trading platforms such as Coincheck.
Taxation and taxes: REA and FLAT TAX
The year 2018 is also the year of the establishment of the tax on real estate assets (REA), flat tax and withholding tax. Since January 1, the ISF has been removed and replaced by the REAs which now applies to individuals whose net value of the portfolio exceeds 1.3 million euros. This new tax includes real estate assets and rights held indirectly on January 1 st .
The introduction of the Unique flat-rate levy (PFU) or flat tax of 30% on capital income, profoundly changes the taxation of savings. Investments subject to this new tax are income from movable capital, interest and dividends, capital gains on the sale of securities, income from home savings plans and accounts, gains on life insurance contracts. The introduction of the flat tax aims to reduce the taxation of capital income and is therefore an incentive for financial savings.
As for the withholding tax, it applies from 1 January. You can find out more in our article about what has changed since 01/01/2019.