French Holiday Home Tax Scrapped

French parliament has recently scrapped plans to introduce a new tax on individuals with second homes in France.

London, UK (Pryce Warner International) June 28th, 2011 – Expats and French nationals alike came out against the proposal almost instantly, leading president Nicholas Sarkozy to scrap the plans over the weekend.

Expats with homes in France are already subject to several taxes and the suggestion of a new one equivalent to 20% of the properties rental value quickly prompted a backlash from the large Expat community in France.

Despite the controversial nature of the tax some claimed that the effects would have been minimal. One analyst stated that council tax in the UK is much higher even with the new tax and therefore it would not have had a significant impact of the property market, one of the healthiest in Europe at the moment.

The law was set apply only to those that do not live in France throughout the year and were not renting the property. Despite the fact that people in this situation are not contributing to the French economy through income tax, the new proposal was deemed discriminatory against Expats.

With Expats to have their own MP in France from next year, some have suggested that the move by Sarkozy is part of an effort to woo voters in the run up to the 2012 elections.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International, a Financial Services Company for Expats commented: “Though the new tax proposal would not have affected a great many people and despite the fact the equivalent tax in the UK would still be higher, the proposals were still highly unfair. It would have been senseless to additionally burden a minority of people for so little monetary gain. Expats with second homes in France can rest easy for now, knowing that Sarkozy is unlikely to try and re-introduce any such regulations prior to next year’s election.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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