France property = Buyer beware!

As recently reported in a local English paper, 2nd-residence property owners may soon face a double charge (see below article): “OWNERS of French holiday homes are upset over the government’s plans to hit them with social charges when renting them out or selling them. The ideas have been included in the draft version of the second 2012 Corrective Finance Law, which is to be debated in the National Assembly from July 16-18. It will then go to the Senate, before a final vote before next month. Not only would the charges – recently raised to 15.5% from 13.5% – apply to capital gains, as was rumoured to be being planned, but it is being proposed they would also apply to income that non-residents make from renting properties out. At present they pay French capital gains or income tax on these income kinds, but, unlike French residents, are exempt from the social charges (notably the CSG and CRDS) on top. One commentator on Connexion’s Facebook page, said: “We have made rural France a very lovely place and spent a lot of time and money doing up wrecks; [the government] should be happy with us, not robbing us.” Property specialist Harris Raphael, of Pioneer France, said: “There is no doubt that these tax increases will have a significant impact, further damaging an already fragile property market, at least in the short term, and causing doubts in the mind of prospective holiday purchasers”. Estate agents in areas like the Dordogne have expressed concerns – one told Le Figaro “We’re worried. These new taxes will slow activity, that’s for sure… customers who are selling are afraid.” The move comes after the capital gains regime was toughed last year, with exoneration after 30, instead of 15, years.” Source: The Connexion