Taxes on Brits’ French homes set to soar

Taxes on Brits’ French homes set to soar

The worst nightmare of 200,000 Brits who own second homes in France looks set to be realised after newly-elected French President Farnçois Hollande announced he will increase taxes on foreign-owned second homes.

Post by Colin Burns

Tax on rental income is set to leap from 20% to 35.5%, while capital gains tax on property sales would rocket from 19% to 34.5%. For a UK resident this tax is offset against UK income tax. For most higher rate taxpayers this will make no difference as UK rates are 40% to 50%, so it just means more tax goes into the French coffers and less to our hard-pressed exchequer!

The inheritance tax-free allowance between parents and children of about €160,000 (£134,000), available to any child of the deceased, is expected to be slashed to €100,000 (£79,413). The moves are part of a wider series of increases set to be voted through in the French parliament soon, designed to produce €7.2bn (£5.8bn) to plug a massive budget deficit.

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