french government drops plans for second home tax
News Posted On: 21 June 2011
The French government has dropped plans to impose a new tax on second home owners, even though they were approved by parliament just over a week ago. The new law would have hit non-resident French homeowners choosing not to let out their properties on a regular basis, and would have brought in an estimated €176 million a year.
The U-turn came on Saturday, 18 June after Sarkozy and the Minister François Baroin met with a group of UMP senators who represented the French expats and shortly afterwards the Transport Minister Thierry Mariani who also attended the meeting, reported that the bill had been dropped. The government had tried to introduce the bill as it believes second homeowners should pay more towards the national budget for the services and infrastructure used but not funded through income tax.
British homeowners would have been especially hard hit by the tax, and its opponents had been planning to take the issue to the European courts on the basis that it was discriminatory. Denis McShane, UK Labour MP and former Europe Minister said that this was welcome news for those Britons who live or work in European countries, and he felt that EU laws wouldn't have permitted such a selective tax to be implemented.
A key factor in Sarkozy's decision may have been that French expats will be able to elect MPs to Parliament for the first time from next year, and proceeding with such a tax could have damaged him politically. British homeowners have around 180,000 homes in the country, and other than the Dutch, are the largest group of overseas buyers in France. All in all it would have affected around 360,000 households.
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Written by Les Calvert
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