New social charges for holiday lets in France

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New proposed social charges for holiday lets in France

Owners who are non-residents may soon be subject to social charges on the rental income and capital gains of holiday homes in France.

As report, "During the progress of this matter through the French Parliament a sizeable body of members from both the National Assembly and the Senate raised objections to the proposed charge, which they considered contrary to European law.

In particular, they cited European Directives 883/204 and 1408/71 on the coordination of social security systems in the EU, as well as a landmark European Court of Justice (ECJ) judgement in February 2000, which confirmed that individuals should only be required to pay social charges in the country in which they were resident.

In their consideration of this proposed measure, this argument was not accepted by the French Constitutional Council, who stated that the payment of the social charges conferred no social security rights or benefits and did not, therefore, conflict with European regulations." Source:

This means that income generated from holiday home rentals owned by non-residents will continue to be subject to a 20% rate of income tax, as well as the 15.5% social charge, giving a combined tax charge of 35.5%.

Simultaneously, there will be an increase in capital gains tax. The sale of holiday homes by non-residents is now subject to an additional tax charge of 15.5%, with an operative date of 17 August.

These rates reduce on a sliding scale after six years of ownership, but with full exemption only possible after 30 years of ownership.

The charge has been applied retrospectively on the rental income from holiday homes received from 1 January 2012.

The charges are imposed on the net taxable income or capital, after deduction of eligible costs and allowances.

See our advice page for more information about French rental income tax.

Find out more about French social charges

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Please be aware that the information set out above is for advice purposes only. If you have questions about French tax laws, we suggest that you contact a lawyer.