New tax rules for French holiday homes
UK property owners who have invested in a French property were shocked by the news last week detailing the Government’s plans to raise property taxes.
Non-resident owners of French property will face a 15.5 per cent tax increase on rental income bringing the rate up to 35.5 per cent and will be backdated to the start of January and capital gains tax will increase by the same percentage from the end of July bringing the rate to 34.5 per cent.
However tax specialists believe the changes will not be too damaging for British and other overseas owners of French homes as the new taxes will not apply to owners of holiday homes who do not rent their properties for commercial gain and for those that do it is possible to offset associated costs against the potential taxable income.
However as is the case with most taxable situations existing and potential French property owners are advised to seek appropriate, professional advice regarding the new tax regulations.