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Corsica OKs crackdown on holiday home buying

In an effort to calm real estate speculation, Corsicans approved new restrictions on Friday that would require people to live on the Mediterranean island five years before they can buy property.

Corsica OKs crackdown on holiday home buying
Corsican lawmakers want buyers to live on the island five years before they can buy property. Photo: kjunstorm/Flickr

Anyone wanting to buy property on Corsica will have to have lived there for five years under proposals approved Friday by the French Mediterranean island's assembly.

A proposal which supporters say is essential to prevent indigenous islanders being priced out of their homeland was approved 29-18 with four abstentions in a vote at the left-dominated regional assembly whose extensive powers include housing policy. The bill must still be approved by the French parliament. 

The proposal was initiated by the chairman of the island's executive committee, Paul Giacobbi, who said it was designed to counter those inclined to invest speculatively in the largely unspoiled island's property sector.

“It’s time we had some kind of regulation and asking people to live here for a certain amount of time before they are allowed to buy a property is a good way to do it and a very good way of ending property speculation in Corsica," Giacobbi told The Local previously“I am not against foreigners. My family and wife come from abroad. Corsica is a land that welcomes foreigners.

Around 40 percent of properties on Corsica are second homes owned by people living off the island. The island currently has a population of 310,000, a majority of whom are incomers, and the number of residents is growing at a rate of 4,000-5,000 a year.

That trend, coupled with Corsica's outstanding natural beauty, has fuelled a strong demand for land for development and the money to be made from it is said to be a factor in the feuding between criminal gangs which have given the island a very high murder rate.

There have been more than 40 assassination-style killings on the island since the start of 2012.

Under the proposal approved on Friday, Corsicans living and working away from the island will be exempted from the residency requirement.

"This provision is key, it confirms the link between the Corsican people and their land," said Gilles Simeoni, the mayor of the port city of Bastia who heads an 11-member group of moderate nationalists in the assembly.

The proposal is subject to approval by France's parliament and may also face challenges in the French courts or through the European Court of Justice from those who view it as discriminatory, prejudicial to their economic interests or contrary to the principles of the free movement of people within the European Union.

Restrictions on second home ownership are not unprecedented in the EU however. Denmark notably has strict rules governing who can buy holiday homes on parts of its coastline which are widely regarded as being designed to prevent the areas from being overrun by second home owners from neighbouring Germany.

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PROPERTY

Property taxes: How much will it cost to extend your French home?

Installing a swimming pool, building a garden shed, or adding a conservatory to your French home has become more expensive in 2023.

Property taxes: How much will it cost to extend your French home?

If you are planning a renovation project in 2023 you’re likely looking at rising cost for materials and labour due to inflation – but there is one other cost to consider; taxes. 

In France there is a one-off tax that has to be paid on certain building works, and the government has raised the rate for this.

The taxe d’aménagement, sometimes referred to as the garden shed tax, applies to all property development – construction, reconstruction and extension – of buildings that require planning permission or a building permit.

Garden sheds, swimming pools or extensions with a surface area of more than 5 square metres are subject to the development tax – although a 50 percent reduction is applied to the flat-rate values of certain buildings, particularly the first 100 square metres of main residences.

READ ALSO Everything you need to know about installing a swimming pool at your French property

The tax is collected by local councils, who set their own percentage rates for the tax, working off the base rate set by the government.

A decree published in the Journal Officiel set the base figures for 2023 at the following rates: 

  • €1,004 per square metre in Île-de-France (up from €929 per square metre in 2022);
  • €886 per square metre outside Île-de-France (€820 per square metre in 2022).

The flat-rate values per square metre of building space, which constitute the basis for the development tax, are revised on January 1st of each year according to the latest construction cost index published by national statistics body Insee. 

Additionally, specific rates are set for:

  • €250 per square metre  for a swimming pool (up from €200 in 2022);
  • €12 per square metre of ground-fixed solar panels (up from €10 in 2022);
  • €3,000 per wind turbine more than 12 metres high;
  • €3,000 per pitch for tents, caravans and mobile leisure homes;
  • €10,000 per pitch for a holiday chalet or bungalow.

The amount of the tax is calculated according to the following formula: 

(Taxable area multiplied by the government-set base figure) multiplied by the percentage tax rate set by the local authorities. This gives the total to be paid in cents. Bills are rounded down.

So, the tax for a 30 square metre extension in an area where the combined local and departmental tax rates total 6.25 percent would be calculated like this:

30 (the size of the development) x 886 (the base tax rate outside Ile-de-France) = 26,580

6.25 (local and departmental tax) x 26,580 = 166,125 cents, more usually expressed as €1,661. 

If the total payable is less than €1,500, you will receive a bill in the six months after planning permission was granted, with details of how to pay.

Otherwise, it is paid in two instalments, 12 months and 24 months after authorisation, with a 10 percent surcharge applied in cases of late payments.

READ ALSO The hidden costs of owning property in France

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