french property tax may not be so bad
News Posted On: 07 June 2011
It’s now thought that the French property tax on second homeowners may not be as bad as previously feared. The property tax, if approved will take effect from next year onwards and will affect all those who have a holiday home but who choose not to rent it out on a regular basis.
The tax won't just affect foreign holiday home owners, but also French expats who are no longer residents, even if they have paid tax for three of the previous 10 years, and will be calculated on the potential rental value of the home. This new tax won't have any effect on investment properties and properties that are rented out.
At the moment France property owners already pay two different taxes, which are the taxe fonciere and taxe d’habitation, and there have been concerns that another tax could seriously affect the housing market in France. The new tax is to be calculated according to the size and location of the property, with those in prestigious locations paying more.
The argument is that people who own properties in such areas can afford to pay more tax, while those who have chosen properties in more rural areas won't be charged very much. There are doubts that it can even be implemented as it is almost certain to be challenged under European law as some feel it is discriminatory. The lawmakers have already considered this and have worded the new tax extremely carefully so that it includes everyone who owns a second home, including French citizens.
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