Shocking New 20% Tax On Non-Resident Home Owners in France

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Shocking New 20% Tax On Non-Resident Home Owners in France


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Old 18th May 2011, 02:17 PM
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Default Shocking New 20% Tax On Non-Resident Home Owners in France

In all its wisdom, the French government has decided to slap a new 20% tax on owners of houses who are not resident in France.

French government slaps new council tax on foreign-owned second homes - The Riviera Times Online

The tax will be 20% of the rental value of the house over a year.

For people like me, who own a fairly large B and B guesthouse, and already pay two forms of tax on the property, it is grossly unfair and will cost upwards of 5k extra a year. I am non-resident but my parents live in the house, they are resident in France and pay French taxes.

If they apply this to gites and B and B's, there are going to be an awful lot of Brits, Germans and Dutch trying to sell their property before it takes affect. Indeed, the money it generates for the French government will probably be eclipsed by the negative impact this will have on the housing market.

Does anyone have any further information on this? Is it likely to apply to gites and B and B's? Is there a loophole because of the fact my parents live in the house and are permanent French residents?

Any help would be much appreciated.

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Old 18th May 2011, 02:43 PM
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In another article on the subject I read, "The properties affected are those owned for personal use, not holiday rentals, and is equivalent to 20 per cent of the cadastral rental value."

Does "holiday rentals" refer to just long term lets or B&B/Gites as well? Still in the dark on this one....

New tax on foreign-owned second homes: This French Life

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Old 19th May 2011, 04:21 AM
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Would this tax apply on a primary residence. owned and lived in - in France- by an ex-pat? Many thanks. I would have a carte de longue sejour, and retired...after five years I suppose i can apply for citizenship...

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Old 19th May 2011, 08:08 AM
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I haven't heard anything about this - other than what's been posted here. But logically speaking, this is a tax on residential property, not on business property. By definition, a B and B would seem to be business property, though I guess it depends on how you have the guesthouse set up. But if your parents are living there and running the B&B, then it's not your residence and thus shouldn't be hit with this tax.

What they appear to be gunning for are absentee property owners - who potentially avoid the taxe d'habitation by leaving the property vacant on January 1st and who don't rent it out when they're not in residence (which would generate income taxable by France).

Mobius, I wouldn't worry about it if you're resident in France. You don't need to take French nationality - you're already paying the appropriate taxes.
Cheers,
Bev

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Old 19th May 2011, 09:12 AM
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Tax is on second homes, as holiday homes, if you let the house out and already pay tax on this it doesn't affect you. The tax is being introduced because many French live abroad but keep a home in France, that's who the tax is aimed at, but obviously anyone owning a second home in France, whatever nationality will get caught up in it.

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