French tax rebound boon for Expats
There’s good news for Expats living in France after the French government made a U-turn over its plans to launch a tax grab on second homes.
The previous Sarkozy government doubled the amount of time before second home owners could claim exemption from capital gains tax. It increased the time period from 15 years to 30 years in February in 2012.
However, as concerns mounted that the policy would slow down the French property market, current French President Francois Hollande said that extending the time frame had been a mistake. Now, thanks to his U-turn any second homeowner in the country for more than 22 years will have complete exemption from capital gains tax. The new rules come into force on the first of September.
Graham Keysell of Paris based Spectrum IIFA Group told the Telegraph that the draconian 30 year policy dissuaded a number of his clients from selling their second homes.
“Not only is this tax imposed on French property, but it also applies to properties in the UK owned by expats. One of my clients was facing a bill of over €83,000 (£70,000) on a flat she has owned in Devon for the past 25 years. You can imagine her relief on hearing of the proposed changes,” he said.
Tax expert Howard Bilton, chairman of the Sovereign Group cautioned that expats are unlikely to escape the UK taxman however.
“Unfortunately the relaxation of the rules on capital gains tax on houses in France probably will not help most UK residents as they will still have to pay UK CGT on any gain in value realised upon resale of their French property,” he said.