French towns rebel over second home tax hike

French towns rebel over second home tax hike
Some southern French towns will not be implementing the 20 percent tax hike on second homes. Photo: Vic Burton/Flickr
Local authorities in several towns in France have said that they will refuse to implement new government plans which could see tax on second homes increase by as much as 20 percent.

Many people with properties in the southern towns of Cannes, Nice and Arcachon will no doubt be breathing a sigh of relief this week after town authorities announced that they would not be imposing the tax hike on secondary properties after all, Europe1 reported.

The move comes in spite of the fact that the number of secondary residences in these towns is much higher than the national average.

The controversial 20 percent surcharge on the existing property tax – known as "taxe d'habitation" – for second homes would be applied to 30 zones across the country including Lyon, Marseille, Bordeaux, the Mediterranean and Atlantic coasts and Paris, where one in six apartments is believed to be a second home.

The plan is to increase the tax in areas where housing is in short supply and prices are high and would only apply to unoccupied homes, which have not been rented out.

The proposal is part of the government's supplementary budget for 2014 and it is estimated that it could bring in €150 million to those communes that apply it.

The French government claims it would also increase the availability of property to let by encouraging owners of second homes to rent them out when not in use rather than leave them empty.

The tax would also be used to raise funds for the affected communities, which would decide for themselves whether to introduce the new levy. It would come into force on 1st January 2015.

Since the tax was announced last week it has provoked angry reactions.

Jean Perrin, president of the National Union of Property Owners, said that real estate in France had become “a lamb to the slaughter”.

“It’s a new craze of this government to tax property," he said. "It is a mistake because it will increase the cost of real estate and punish owners who have worked hard to have a second home and make such an investment. Then they (the government) lie and say that this is to free up housing but that’s a fundamental error.” 

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