French tax changes affect holiday home owners

Following on from our report last week about British investors making up a high proportion of new property buyers in the French Alps, there now comes news of worrying changes to French taxation procedures that could negatively impact owners of holiday homes throughout the country.

President Hollande was elected to office on a ticket that promised to curb the country's budget deficit and now new changes to capital gains taxation are included in a raft of reforms that are coming into force.

Under the new rules, a second home owner who makes a capital gain between £80,000 and £120,000 will be liable for a tax payment levied at 22%, which represents an increase from the previous level of 19%. Above that amount the tax increases another five points.

This comes on top of the President's decision previously over the summer to impose a 'social charge' of 15.5% on non resident owners.

Further changes proposed by the French National Assembly's Budget Committee chairman, Christian Eckert, could see a further 9% surcharge on any capital gains which exceed £160,000.

All taken together, many people are expecting the changes to have a negative impact on an already shaky property market by dissuading potential overseas buyers from making new investments.

If this were to prove to be the case, the changes would be counterproductive and may even see a reduction in the sums raised for government.

Whether you are thinking of investing in French property or even looking at selling property to take out funds before any further surcharges might come into force, you should always seek the advice of a foreign currency exchange expert as to how best move funds from country to country.

For the best and cheapest way to send money abroad, it is best to use a specialist money transfer service as these will often be cheaper than traditional methods.

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