Britons with second homes in French towns and cities will see their council tax rates rise by hundreds of euros a year after President Hollande’s government yesterday rounded on “wealthy foreigners” in a desperate attempt to raise money.
The move is designed to generate €150 million for local councils, and will hit anyone who has a second home in 28 cities and suburbs, including Paris and Nice.
No one with a second home in rural France will be affected.
Holiday Homes for sale like this one (GTY01287) will not be affected.
The so-called weekend tax has been sold by President Hollande as a measure to address France’s housing crisis by claiming that it will encourage property owners to rent out their second homes. However, in truth, the levy is a means of raising new revenue for hard-up local councils from a group of people, many of whom do not have the vote.
The Socialist cabinet has recently been forced to slash state subsidies for local councils to try to meet calls from Brussels to cut the French budget deficit. At the end of last month, President Hollande was rattled by a threat from Brussels that it would reject his budget because it did not reduce the deficit significantly. The government then was forced to announce a €3.7 billion cut in subsidies for next year’s budget.
However, the tax has caused fierce controversy amid signs that the government was itself split over the measure. Under the plan disclosed by Michel Sapin, the finance minister, urban councils will be authorised to levy a tax equivalent to 20 per cent of the residency tax paid by all households for anyone with a second home in one of the prescribed 28 town areas.
This will add €90 to the rates on an average flat in Paris — which are among the lowest in France — but €200 to €300 in some of the capital’s suburbs and in other cities. All households pay at least one type of council tax — a residency tax, paid by everyone, and an owner tax, paid only by those who own their property.
French press reports suggested that tourist destinations popular with the British, such as Annecy in the Alps, or Bordeaux in the southwest could also be hit by the tax.
Most of the 200,000 Britons with holiday homes in France will escape the tax rise since their properties are in rural areas. However, 10,000 Britons own second homes on the French Riviera, some urban areas of which, such as Nice, will be included by the new tax. Many Britons have also invested in property in cities such as Lyon and Toulouse.
Rural houses like this (CLS00397) will not be affected.
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This article originally appeared in The Times on Wednesday 5th November 2014.
Blog submitted by: David at The French Property Network - Cle France.
