Jump to content

New tax on non resident home owners


Aly
 Share

Recommended Posts

  • Replies 256
  • Created
  • Last Reply

Top Posters In This Topic

On a slightly serious note, does anyone know if this new tax will apply to leaseback apartments owned by non-french residents?  Just picked up on Parsnip's comment re exclusive use.  Leasebacks are commercially let to holiday companies for 9+ years at a time with a fixed annual rental and little or no personal use (we have only 2 weeks per year in ours).  If they turn out to be exempt it might help the market for such property, which is woefully depressed at present.
Link to comment
Share on other sites

Well the way I read the original part of this thread was it's not just the English it's anyone with a second home in France i.e. French, German, Dutch, Belgian etc. Whist I am not so surprised at the DM article I was a bit with the Torygraph one. Perhaps it may be best to wait and see if anything really happens and if it actually becomes law. There is a big difference between thinking about doing something and actually doing it.
Link to comment
Share on other sites

[quote user="Quillan"]Whist I am not so surprised at the DM article I was a bit with the Torygraph one. [/quote]

So was I. I expected the political bias (and can therefore understand the focus on the 350,000€ (or was it £?) property because it would be perceived that the average (!) reader would identify more with an expensive property than the more rustic, 100,000€'s worth that is probably more common. But to get the facts wrong - or to deliberately spin them for maximum windup purposes - is disappointing.

But whenever I see a story covered about which I have some knowledge, I'm usually startled by how wrong the media gets it. And increasingly, I think it is deliberate - they don't let the facts get in the way of inciting outrage. [:P]

Link to comment
Share on other sites

[quote user="Daft Doctor"]On a slightly serious note, does anyone know if this new tax will apply to leaseback apartments owned by non-french residents?  Just picked up on Parsnip's comment re exclusive use.  Leasebacks are commercially let to holiday companies for 9+ years at a time with a fixed annual rental and little or no personal use (we have only 2 weeks per year in ours).  If they turn out to be exempt it might help the market for such property, which is woefully depressed at present.[/quote]

I believe that leasebacks would be exempt, as they are not for the owner's exclusive use.

The articles mentioned above, which seem to essentially be the same article, are so riddled with inaccuracies that it is difficult to know where to start . The authors certainly haven't read the original French Govt release.

Regards

Pickles

Link to comment
Share on other sites

[quote user="Catalpa"][quote user="Quillan"]Whist I am not so surprised at the DM article I was a bit with the Torygraph one. [/quote]
So was I. I expected the political bias (and can therefore understand the focus on the 350,000€ (or was it £?) property because it would be perceived that the average (!) reader would identify more with an expensive property than the more rustic, 100,000€'s worth that is probably more common. But to get the facts wrong - or to deliberately spin them for maximum windup purposes - is disappointing.

But whenever I see a story covered about which I have some knowledge, I'm usually startled by how wrong the media gets it. And increasingly, I think it is deliberate - they don't let the facts get in the way of inciting outrage. [:P]
[/quote]

That's exactly right, I could not agree more. The even bigger problem is do you believe the other stuff that you don't know anything about, we could be being sold a right load of old rubbish and not know it. [:@]

Link to comment
Share on other sites

I haven't read the whole of this thread, it is quite long, so forgive me if I'm repeating something.

People are getting quite hot under the collar about this proposal; quite rightly so, as it is discriminatory. However, the combined cost of the habitation and foncière is a small fraction of what I pay in the UK for council tax, with a similar level of service provided. The proposed foreigner tax will erode the difference by a small amount, but I still think we're getting a better deal here.

Link to comment
Share on other sites

We pay in the region of 1300 euros per year in combined TF and TH. This would add another 600 euros, and all of that on a property which we are now only able to visit about 3 times a year. I would not want to rent it out, it having been our family home for nearly 10 years. The only consolation seems to be that we won't be liable for the first 5 years, having been recently resident in France. Sadly, we shall probably sell it during that time, market forces permitting.

Link to comment
Share on other sites

[quote user="tonyv"]I haven't read the whole of this thread, it is quite long, so forgive me if I'm repeating something.

People are getting quite hot under the collar about this proposal; quite rightly so, as it is discriminatory. However, the combined cost of the habitation and foncière is a small fraction of what I pay in the UK for council tax, with a similar level of service provided. The proposed foreigner tax will erode the difference by a small amount, but I still think we're getting a better deal here.
[/quote]

I must really go and do some work now so I will be quick. Who is it discriminatory against, as far as I can see it's second home owners whatever nationality they may be. My point in putting in the links was firstly, as pointed out, there are not that many with £350k second homes (I don't know personally of anyone who has such an expensive second home here) and it implied that only the Brits would be taxed which is wrong.

Link to comment
Share on other sites

[quote user="Catalpa"][quote user="Quillan"]Whist I am not so surprised at the DM article I was a bit with the Torygraph one. [/quote]
So was I. I expected the political bias (and can therefore understand the focus on the 350,000€ (or was it £?) property because it would be perceived that the average (!) reader would identify more with an expensive property than the more rustic, 100,000€'s worth that is probably more common. But to get the facts wrong - or to deliberately spin them for maximum windup purposes - is disappointing.

But whenever I see a story covered about which I have some knowledge, I'm usually startled by how wrong the media gets it. And increasingly, I think it is deliberate - they don't let the facts get in the way of inciting outrage. [:P]
[/quote]

You know, Catalpa, I was just talking about this very matter with OH yesterday.

Don't know why these people have the gall to call themselves journalists.  None of them seems to check the accuracy of the stuff they write.

In my day (yes, I know, a l-o-n-g time ago), you'd be ripped apart if you submitted a fifth or even fourth form essay spouting such guff [:'(]

Link to comment
Share on other sites

It clearly is discriminatory in that it targets second homes owned by people who do not live in France, it does not affect French residents.

Whether that is sufficiently discriminatory to make it illegal under EU laws is, however, another matter.

Link to comment
Share on other sites

Quillan, the proposals do not impact on French residents with second, third or even fourth homes! It is purely aimed at non French residents with a second home in France. However, that is where it is possible the new tax will be ruled illegal by the EU, as you cannot charge a non French resident EU citizen for having a second home in France, if you don't apply the tax to French residents.

Spain until recently used to take this approach to capital gains tax, charging non Spanish residents a higher rate on profits from property sales, than Spanish residents. The EU ruled this illegal and the Spanish government is now having to repay multi millions in overpaid taxes to non resident EU citizens as a result.

My guess is that the rental exemption will be strictly enforced, as it is too much of a potential loophole, and for it to apply it might be the property needs to be rented for a significant part of the year, which might not be achievable with seasonal rentals.

What will put a lot of people off with this new tax is the principle and the worry that this tax will be an easy target to increase year by year. Also the need to complete an annual French tax return, even if the property is not rented is a hassle factor. (The proposed tax will not be raised automatically like other French property taxes, but will be raised following the submission of a personal tax return which all French non resident second home owners will be required to do, even if their property is not let.)
Link to comment
Share on other sites

I was under the impression that it did apply to french second home owners if they lived outside France and  had not paid French tax in 6 of the last 10 years. I may have got the details wrong but paying tax already in France seems to be a way of avoiding the 2nd home tax. I suspect this also stops this tax being ruled as discriminatory
Link to comment
Share on other sites

[quote user="Rabbie"]I was under the impression that it did apply to french second home owners if they lived outside France and  had not paid French tax in 6 of the last 10 years. I may have got the details wrong but paying tax already in France seems to be a way of avoiding the 2nd home tax. I suspect this also stops this tax being ruled as discriminatory[/quote]You are correct in so far as we know the details since this is a proposal at this stage.  The discrimination is against those who live in another country.  Yes, French people who live elsewhere but keep a home here will also be affected.  However, a good percentage (somewhere in the is thread is a piece on this subject which 5E posted) of second home owners is in fact French and living in France.  But those latter are not to be taxed since (I guess the "logic" goes) they pay income tax here. 

I imagine the EU Commission will look at this and come to its own conclusions but as it's been investigating the health question for three years now and has yet to publish a finding, I suspect that the tax could well be brought in and many more non-French residents will have sold their homes and taken their money elsewhere (if they can afford to) so that whatever they turn out to be will be moot for most.

Link to comment
Share on other sites

[quote user="tinabee"]

If an equivalent tax already exists in Spain (deemed rental income tax) , I can't imagine the EU quashing it ..

http://www.properties-in-europe.com/info_spain_tax.htm

[/quote]What I can't quite make out from that, Tina, is whether by non resident, they mean not resident in the house itself (ie they could be people living permanently in another part of Spain) or whether it means not a Spanish resident.

EDIT : Also, see Sprogster's comment:

"Spain until recently used to take this approach to capital gains tax, charging non Spanish residents a higher rate on profits from property sales, than Spanish residents. The EU ruled this illegal and the Spanish government is now having to repay multi millions in overpaid taxes to non resident EU citizens as a result. "

Link to comment
Share on other sites

[quote user="cooperlola"][quote user="tinabee"]

If an equivalent tax already exists in Spain (deemed rental income tax) , I can't imagine the EU quashing it ..

http://www.properties-in-europe.com/info_spain_tax.htm

[/quote]What I can't quite make out from that, Tina, is whether by non resident, they mean not resident in the house itself (ie they could be people living permanently in another part of Spain) or whether it means not a Spanish resident.

EDIT : Also, see Sprogster's comment:

"Spain until recently used to take this approach to capital gains tax, charging non Spanish residents a higher rate on profits from property sales, than Spanish residents. The EU ruled this illegal and the Spanish government is now having to repay multi millions in overpaid taxes to non resident EU citizens as a result. "

[/quote]

AFAIK it is non-resident in Spain.

There is a clearer explanation here http://www.advoco.es/most-requested-services/37-spanish-tax-form-210.html

There is also a similar, but different, tax in Ireland which is on non-principal residences (i.e. second home owners, irrespective of where they reside)

 

Link to comment
Share on other sites

Tinabee, not sure how up to date the the Spanish tax website is, as I am sure Spanish wealth tax was abolished last year.

If the tax is brought in on all second home owners whether they are or were French resident or not, then it will be EU compatible.

Link to comment
Share on other sites

[quote user="Sprogster"]The proposed tax will not be raised automatically like other French property taxes, but will be raised following the submission of a personal tax return which all French non resident second home owners will be required to do, even if their property is not let.[/quote]

None of this affects me directly, but interests me nonetheless, if only for friends who will be affected.

Surely not even the French, with their predilection for admin extremes, would do it that way? Another umpteen tens of '000's of tax returns to process ..................... no, no no.

Tax d'Habitation would be the obvious way to do it. You've got the Valeur Locative Brute + you know whether the property is a residence secondaire. You make the assumption that it isn't available for rent unless the payee cries "Foul".  Easy done - 20% surcharge on the VLB.  Administratively, that's what I'd do.

Forgive me, I'm not being flippant about this, nor have I read all the thread (so this may well have been said already) and I'm totally supportive over the daftness of the likely tax, but that's the way it should be levied if it comes to that.

   

Link to comment
Share on other sites

So, 22 pages and what could we do about it?

How many people that own second homes also have French bank accounts with money in? 

How's about everyone transferring these funds back to the UK leaving a bare minimum in France just for a week.  Maybe the loss of a large sum of money for a little while would help persuade the French bankers to side with us.

Link to comment
Share on other sites

Not that I am trying to second guess the French establishment but I a agree with Gardian forcing Non residents to fill out a tax return! against my Uman rights mate!

If necessary I would set up an EA cut my inlaws lawn once a month for 3 months they likewise will cut mine for the minimum wage and that will be declared as annual income making my resident for tax purposes (6 months if necessary) and stuff the Non residents tax. If it is even allowable under EU law (discrimination of a member country)

Link to comment
Share on other sites

As hinted from the last few posts, the big problem would be collecting the tax. Even if it's made as an add-on to taxH. or taxF., the people who are due to pay it aren't resident in France and can be very elusive if they wish [;-)]

Filling out a tax form? Impossible to administer.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share


×
×
  • Create New...