French government dropping holiday tax plan

The French government will be scrapping the plan to impose a holiday tax on all those who own a holiday home in France, which would’ve hit foreign property owners and French expatriates, as part of a wider fiscal reform.

President Nicolas Sarkozy and Budget Minister Francois Baroin were put under pressure from senators representing French expatriates during a meeting on Saturday and decided to omit the measure from a French tax reform package set to pass to the Senate upper house on Tuesday, the daily Les Echos said.

The government hasn’t yet confirmed this report however.

The tax would have angered expatriates, whose vote could be key in what threatens to be a close race between the ruling conservatives and a resurgent left for the April 2012 presidential election.

The measure would have applied to some 360,000 properties belonging to foreigners or French people living abroad, out of a total 3.2 million secondary residences in France, and could have collected 176 million euros in taxes in 2012, around 490 euros per residence.

“French people living abroad found it very difficult to understand,” Les Echos cited a presidential source as saying.

The plan had also alarmed the tens of thousands of foreigners, mainly Britons, who own second homes in France.

Sarkozy is under pressure to fend off left-wing critics who say the current tax system has favoured a wealthy minority during an economic downturn that has left low income households struggling with stagnant purchasing power.

His reform bill, which is passing to the Senate following approval with minor tweaks by the  National Assembly, would scrap a tax shield that benefited the wealthy while also raising the threshold on a wealth tax to relieve some 300,000 households affected by soaring property prices.

Source: Reuters

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This entry was posted on Monday, June 20th, 2011 at 5:33 pm and is filed under French Property, French taxes, Living in France, Real estate market . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “French government dropping holiday tax plan”

  1. Audrey Briggs Says:

    I am in process of buying a house in France. If this proposal wasn’t vito’d, I might have decided not to purchase at this time.

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