United kingdom Daily news: Britons with French holiday homes face paying thousands more in tax hikes

Kamis, 05 Juli 2012

Britons with French holiday homes face paying thousands more in tax hikes

Britons with French holiday homes face paying thousands more in tax hikes

By Travelmail Reporter

PUBLISHED: 06:56 EST, 5 July 2012 | UPDATED: 06:56 EST, 5 July 2012

Ministers are set to challenge a tax grab on British owners of holiday homes in France, it has been revealed.

President Francois Hollande wants to hike taxes on foreign-owned second homes as part of his plans to revive the nation's ailing economy and fill an Â£8billion hole in its budget.

It follows similar proposals, which Britain opposed, made under former president Nicolas Sarkozy, according to reports.

Gallic retreat: Some 200,000 Britons own holiday homes in France

Tax on rental income would increase from 20 per cent to 35.5 per cent, applied retrospectively from January 1, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent from the end of this month, The Daily Telegraph reported.

The hike - to apply to those who live abroad and do not pay their taxes in France - could mean second-home owners will end up paying thousands of pounds more a year.

The Treasury said it had only just seen the details of the plan but would challenge it if it was found to go against EU rules.

'We will need to study the details,' a source said. 'But we will of course challenge any proposal which breaches European single market laws and anti-discrimination rules.'

Mr Hollande's proposals were part of a spending plan presented to the French parliament yesterday, that looks set to impose 7.2 billion euros in new taxes this year.

This includes large one-off levies on wealthy households and big corporations, to plug a revenue shortfall left by slowing economic growth, according to a revised 2012 budget.

Mr Hollande, in power since mid-May, has said that the rich should pay their share as France struggles to cut its public deficit from 5.2 per cent of GDP last year to within 4.5 per cent this year and 3 per cent in 2013 despite a stagnant economy and rising debt levels.

Around 200,000 Britons are estimated to have have holiday homes in France.