Hollande to tax holiday homes

Yesterday, our new President announced new plans for a higher tax regime on holiday homes in France.

Tax on rental income would rise from 20 % to 35.5 %, and capital gains tax on property sales would rise from 19 % to 34.5 %. The extra in each case is being called a "social charge".

A great way to stimulate the French housing market !

It appears that French president, François Hollande, has now withdrawn plans to increase taxes on foreign-owned second homes. The Telegraph website in the UK reports on a meeting he had with UK prime minister, David Cameron, and that in a press conference afterwards the French president said holiday homes were not going to be taxed more. (Well thought out policy strategy that didn’t last one week).

At the time there were more questions than answers on the proposals, including the probability that the proposals would have been in breach of European rules, and many French people resident overseas could have been hit by the plans.

Thanks Richard for your kind words. In our case it isn't an option I'm afraid to remain in France as my mother's dementia, while very bad, does still allow her to recognise me (sometimes she doesn't of course) and to miss me and ask for me. We did place her is a good home for a few weeks and the care was excellent. It is, unfortunately, too expensive to place her there permanently and the kind of home we could afford really isn't an option. I wouldn't want to leave her all alone anyway as she has no other family.

We did bring my mother in law to live in France and she passed away here - she wanted to go back virtually before the ferry had landed. Finding a message on my answerphone from the hospital telling us she'd died wasn't something I'd recommend.

On a happier note with the property - it does seem that you are allowed two years grace after you leave so we can still take advantage of the twenty years or so we have lived over here (I'm still saying over here although I'm currently in the UK as I havn't adjusted yet - looking out at a small back yard instead of walking out into a field takes some getting used to).

And there are a couple of advantages to living in the UK - the bread doesn't go rock hard the day after you've bought it and the supermarkets are very well stocked even though most people are very short of money these days. And the ADSL is much cheaper and faster!!!!

I've also noticed that houses for renovating in France can now be bought at much nearer to the price we paid for ours so maybe one day we will be able to return. (If we can't find a buyer of course we definitely will be coming back).

God Bless and I hope that everything works out very well for everyone who is still in France.

glad you put the third paragraph in Richard, what ever happens in France affects me and my family, nothing that happens in the UK affects us at all!

like the idea of the oil leak and just needing to change the joint/gasket, not scrap the car ;-)

Indeed, Richard,

If the Western world is indeed disintegrating, it happens as much here as it does there. But we don't really care about the downfall of the french society under the greedy bankers, the corrupt politicians, the invading Muslim hordes and the criminal gangs in the suburbs now, do we?

We're not French. It is none of our business. France can fall in pieces around us, as long as we can safely sit in our countryside home and nag ablout the same things happening in our homeland.

By the way, I for one do not believe in the mantra 'Everything Is Getting Worse'. I believe the messages about the death of our culture, security and society are grossly exagerated. It's a media thing, not backed up by the numbers. And the longer you are away from the real life in your old country, the more your view on reality gets slanted by the media. You never read about all the things that don't happen to most people.

If Carolyn writes: "The country is broke, unemployed, government corrupt, benefits & immigration out of control, flooding, drought - and everyone's hometwon unrecognisable with millions of ethnics who do not intend to westernise." it is like a summary of what the news gives you.

Which is NOT the way it really is. If only because most of our hometowns don't even have millions of people, let alone ethnics.

@Carolyn: Clearly you have not integrated well enough in France. If you would have, you'd say exactly the same about your new home country. As do many French.

Thanks Catharine. I'll see if I can find some kind of photo - I usually use a picture of a little Elvis frog on any forums I'm a member of!!!! Probably an improvement on my own.

I'm only doing what I should do and, of course, moving back to the UK means we are no longer residents in France and our home of 20 years is no longer viewed as our first home. Could happen to anyone as 30 years is a very long time. Anyone who comes to France to retire might find as they get older and frailer - 15 to 20 years or so down the line or even sooner than that - that they want to return to spend their final days at home. Happens a lot. If they can't find a buyer immediately in a market which is only relatively buoyant when the Brits are buying in droves then they might find they need to return to the UK before they've sold their property and what happens? They're no longer a resident and they get clobbered for tax.

It seems to me that some consideration should be given to people who have had to leave the house which was their first home for a very long time (not just thinking of my own situation). Captial Gains Tax should also be just that - a tax on capital gained not just on the difference between the buying and selling price so allowances should be given for the amount of money you've spent to restore your home/property not just on the money you've spent employing a registered builder.

Ps any chance of a profile picture please so I can see who I'm congratulating? Thanks!

@ Philomena - well done you for doing the right thing by your family. And I wouldn't worry too much as what Finn says below ( "However, collecting social charges from non-residents is illegal, and I believe it will have to be struck down for that reason.") is a view I have heard expressed by several lawyers.

To Richard Partridge

We have had to leave our home after 20 years and return to the UK to look after an elderly parent with acute dementia. And while we lived in it we didn't think twice about pouring money into our home. Neither am I going to make any apologies for doing so.

We bought our materials from builders merchants in the area - quite legally and above board and we didn't at any time pay anybody under the table either to work on the house or for the materials.

Not everybody can do what they want in life - family has to come first. Maybe there would be a possibility of returning to our home in the future - that won't address the immediate problem if CGT does rise as Monsieur Hollande has outlined as it won't be possible to buy the kind of property with the proceeds of a sale that would be suitable for her - if a buyer can be found that is. I am not prepared to abandon her to Social Services and a Council funded care home so we're stuck.

No, three years. 27 to go! The Commission, sometimes, however a whole bunch of us have a complaint pending for three years so yes, can be quick, can also be snail pace.

Finn, I doubt I shall be around in 30 years time and if my OH is then she'll be pretty elderly herself, so not much to our advantage there. The European Commission, I am always told, is so snowed under with business to deal with that everything takes years, so Hollande will get away with what he wants for quite some time IF even a decision was to go against France.

@David - "prices to rise to cover larger CGT" - No, apart from a very very small number of cases where you're buying a second home from a non-resident, nothing changes at all for the vast majority. And nothing has yet been changed - it has to be voted!

France24 journalist Ben McPartland is looking for interviewees on this subject, please contact him via email benmcpartland@hotmail.com



CGT is only paid when you sell am i correct and on the/differance between what/i paid and what i sell for.

So if i want to buy a holiday home i could expect prices to rise due to seller having to pay larger CGT bill.That will put people off buying.

Richard, in answer to your remarks about Brian and his wife - life is not that simple and we're in a world crisis!!! My OH and I are both having to move because her school is closing and my higher education in France has changed it's rules on employing freelance teachers - neither of us want to move, we bought for good, she's French and we're near her family and our kids are born here etc. but we have to, no choice! No capital gains either though! Otherwise, like you, I have no problem with second home owners paying the same level of plus-value as the French and the rest of us living here! I'm not in it for the money either, I just want somewhere for me and my family to live ;-)

Ricahrd you are quite right, but we - like many others - need a guaranteed regular salary which neither of us has right now and I being almost 64 and unable to work for health reaons for the next few months. So the cards are stacked. I do not disagree with you in principle, but in practice...

Well said Gregor.

Yes Tim, I would agree the media are being ridiculous in constructing a retribution story and some of the reporting puts too much emphais on foreign owners, overlooking French owners non-resident here. Also, since it still has to go to a first vote on 16 July and a second vote later, it is misleading o say that there is now/already such a tax. There is a chance it will be voted out.

Good point about the tourist tax Philomena, perhaps France would like to build a large moat along its borders to keep them out as well. But seriously, they are undermining the whole hospitality industry this way which seems rather ironic given how it was built up and its once good reputation.

First of all, I find it presumptuous and demeaning to both French and British citizens that the Telegraph and the Mirror would try to incite a feud between the French and the British with the suggestion that this new tax on holiday homes in France has somehow to do with what Prime Minister Cameron said recently about "rolling out the red carpet to French wealth." Also, correct me if I'm wrong, but doesn't the following reference in the Telegraph article suggest that the holiday home tax increase applys only to non resident home owners?

"Paul Smith, a partner at accountants Blick Rothenburg said: "The UK Government is subsidising the French. It will be collecting less income tax off taxpayers who have houses in France."

"There are an estimated total 360,000 non-resident second home owners in France".