France plans new property tax on foreign owners
12 May 2011
The French government is preparing to
introduce a special tax on non-resident property owners - mostly
foreigners.
The tax will be set at 20 per cent of a
property's nominal (cadastral) rental value.
It will affect some 360,000 properties, many
of them owned as holiday homes by residents of Britain or the
Netherlands, says news agency AFP. Foreign owners of second homes
in France already pay local property tax - taxe fonciere
(levied on owners) and taxe d'habitation (levied on
occupiers). The new tax will effectively impose a second taxe
fonciere.
The cabinet approved the new tax yesterday,
and it will be debated in parliament in July. If enacted, it could
come into effect next year, raising an extra Euro176 million a year
to help cut the country's enormous budget deficit, said budget
minister Francois Baroin.
But it is likely to be challenged under
European law, since in practice (if not in wording) it will
discriminate against foreign owners of holiday homes. The French
will defend it on the grounds that the law makes no mention of
citizenship. But people who have been French tax-resident for at
least three years out of the previous ten will be exempt for six
years: virtually all such people will be French citizens.
Sources
Bloomberg
Connexion France
The French Paper
Channel News Asia