A group of expats have successfully persuaded French President Nicolas Sarkozy to scrap a controversial new property tax.
Hundreds of thousands of second homeowners faced having to pay the tax on their homes unless they were permanently rented out.
The tax was due to come into effect on 01 January 2012 after being approved by the French parliament just a week ago. However, at the weekend a group of UMP senators who support expats met with Sarkozy and budget minister François Baroin to lobby for the tax to be dropped.
Under the law, non-resident French homeowners would have been subject to a new tax, calculated at 20% of the theoretical annual rent that could be gained from the property.
It was estimated that up to 360,000 homes would have been affected and the new tax would have brought in an extra €176 million a year. A four-bedroom home in the South of France, for example, would have incurred extra tax of €1,500 a year.
Transport minister Thierry Mariani, who was also present at the meeting, confirmed afterwards that the government had agreed not to pursue the proposed tax.
The French government believes that second homeowners should contribute more to the national budget, to make up for infrastructure and services they use but do not fund through income tax.
The senators pointed out that expats would have taken the issue to the European Courts on the grounds that it was discriminatory if it has not been scrapped.
‘The president told us he had been convinced the law was a bad idea and has taken a decision to scrap it,’ said Joëlle Garriaud-Maylam, one of nine senators who was at the meeting on Saturday.
Olivier Cadic, who represents the UK for the Council for French Abroad, said the tax would have unfairly punished British homeowners who have restored neglected properties and ‘brought vitality back to deserted rural villages’.
He added; ‘It is contrary to the notion of equality that is written in to the French constitution, namely that this tax would create a special group who would be taxed. I am very happy with the decision, which will be a huge relief to non-residents with a second home in France’.