French News Archive

Taxation

Mayors to Decide on Tax on Second Homes

Wednesday 07 January 2015

The proposed local rates surcharge on second homes will no longer be mandatory, but a discretionary tax left to local mayors.

As we reported in our November Newsletter, owners of second homes in areas of housing shortage face an increase of up to 20% on their taxe d'habitation.

However, following a debate on the proposed measure in the French Parliament, the tax is now to be a discretionary one available to local mayors in affected areas to choose whether or not to introduce it.

Mayors will be given no discretion to decide the rate of the tax, which must be at the rate of 20%.

The measure concerns 1151 communes in 28 urban agglomerations in France, known as zones tendues*, where a tax on long-standing vacant homes is already in force.

The ostensible aim of the tax is to persuade owners to sell or let out their second home, although few commentators consider this a likely prospect.

It was also noteworthy that during the parliamentary debate on the measure the government emphasised the financial implications for local councils, leaving most observers to believe that it was more about throwing a bone to local councils, who are faced with substantial reductions in central government grants.

Those who hold a second home for business or professional reasons would be exempt, as would landlords who ordinarily let out a property.

However, properties that are only let out on a seasonal basis for holiday lettings will be liable for the tax, provided it is introduced locally.

*Zones Tendues: Ajaccio, Annecy, Arles, Bastia, Bayonne, Beauvais, Bordeaux, Draguignan, Fréjus, Genève – Annemasse, Grenoble, La Rochelle, La Teste-de-Buch – Arcachon, Lille, Lyon, Marseille – Aix-en-Provence, Meaux, Menton – Monaco, Montpellier, Nantes, Nice, Paris, Saint-Nazaire, Sète, Strasbourg, Thonon-les-Bains, Toulon and Toulouse.

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