Holiday homes

opas · Post by **opas** » Thu 05 Jul 2012 09:01

http://www.dailymail.co.uk/news/article ... ax-1m.html

http://www.telegraph.co.uk/finance/pers ... homes.html

blackduff · Post by **blackduff** » Thu 05 Jul 2012 18:45

I'm surprised that nobody posted after the two articles. There's a lot of people are going to be hurt on this new law.

This isn't just against the British, since the French and others will be caught too.

For all owners of secondary homes, it's turning into a disaster.

The latest version of Connexion has an article about how low properties are dropping. Plus, the new constructions are not happening. The loi sciellier (sp?) is ending and there will not be new projects. Nobody wants to invest which will insure future losses.

So we can now say "Thank You" to the last two presidents. Hollande wants to use the money from this new law to create a big platoon of bureaucrats.

Opas, your business will also be soured with the killing of rental properties. Who wants to rent properties.

I'm not sure if there's a good French word like this but "CHAPUZA" is a good Spanish word for which our French politics create. Check it out on the google.

Blackduff[/b]

SusieQ · Post by **SusieQ** » Thu 05 Jul 2012 20:32

The problem is BD, that according to the Tax authorities, within France , UK and most of Europe. Secondary home owners do not declare their rental income in France. Nor do they pay the Taxe de séjour to the commune. Nor do they declare the rentals on their UK Tax returns or American/ German/ Spanish etc.

We can hardly complain about the abuse by the Bankers when apparently Secondary home and rental abuse is prevalent.

Santiago · Post by **Santiago** » Thu 05 Jul 2012 20:39

I'm not sure I understand why this is seen as so punitive.

The taxes are on money produced by the properties. They are only applicable to people who live outside France and do not pay their taxes in France.

For a long time, people resident outside France have been making money on French property without declaring any of for tax purposes, either in their country of residence or in France. This just aims to close that loophole.

The Mail and the Telegraph cite different figures (good reporting guys!) but 15.5% tax on profits is a pretty low level of tax, especially when you can offset profits against lots of costs. Similarly 15% on capital gains isn't bad either. Capital gains, above natural inflation, is generally due to the increased attractiveness of the location, which is often down to investment in infrastructure, schools, employment etc by local authorities, paid for by residents.

Why should people be able to buy property in a foreign country and resell it at a profit without paying any tax?

Can you imagine what those newspapers would say if it was Russians or Nigerians buying buy-to-lets in Britain and paying no income or capital gains tax?

Howard Whatmore · Post by **Howard Whatmore** » Thu 05 Jul 2012 20:44

I should imagine quite a few people on here make a sizeable chunk of their living from people with holiday homes in the area.

They should be encouraged into the area not punished for being here.

HH · Post by HH » Thu 05 Jul 2012 21:12

Howard Whatmore wrote:I should imagine quite a few people on here make a sizeable chunk of their living from people with holiday homes in the area.

They should be encouraged into the area not punished for being here.

I tend to follow Santiago's Analysis, but Howard if they make most of their living from people with holiday homes, providing all parties involved declare their income, pay tax on their gains, there will be no problems!
We only have to look at the Greek problems, the average man in the street paid tax, the ex pats, multinationals, and the Greek tanker barons avoided it.

I am sure Howard, you would prefer Santiago's grasp on the tax changes than the Greek Tanker Barons.

Owens88 · Post by **Owens88** » Thu 05 Jul 2012 21:25

Santiago wrote:I'm not sure I understand why this is seen as so punitive.

The taxes are on money produced by the properties. They are only applicable to people who live outside France and do not pay their taxes in France.

For a long time, people resident outside France have been making money on French property without declaring any of for tax purposes, either in their country of residence or in France. This just aims to close that loophole.

The Mail and the Telegraph cite different figures (good reporting guys!) but 15.5% tax on profits is a pretty low level of tax, especially when you can offset profits against lots of costs. Similarly 15% on capital gains isn't bad either. Capital gains, above natural inflation, is generally due to the increased attractiveness of the location, which is often down to investment in infrastructure, schools, employment etc by local authorities, paid for by residents.

Why should people be able to buy property in a foreign country and resell it at a profit without paying any tax?

Can you imagine what those newspapers would say if it was Russians or Nigerians buying buy-to-lets in Britain and paying no income or capital gains tax?

Hi Santiago

In general the capital gains tax is paid by everybody as the notaire's collect it. Only those clever enough to have bought via a non french company can escape (sell the company).

It is only income and social taxes that absentee landlords avoid. However they pay taxe d'habitation, taxe foncieres.
So it is unfair to suggest that such landlords are not already taxed. or are avoiding tax.

Active holiday home landlords also pay many local suppliers and attract vacationers who also pay local suppliers. So it is unfair to imply that the local community does not benefit.

In fact there is an argument that active holiday homes benefit the community far more than the 'sealed up for 11 months' true 'second homes'.

John

Santiago · Post by **Santiago** » Thu 05 Jul 2012 22:29

active holiday homes benefit the community far more than the 'sealed up for 11 months' true 'second homes'.

That's definitely true. A lot of large homes in our region are pretty much deserted. However, if you make money from something you should be taxed on it, like everyone else. That't the way our society works.

Tax Habitation and Tax Foncieres are not taxes on earnings, they are levies to pay for roads, schools, rubbish collection, street lighting, 1€ bus fares, public amenities and such like that all inhabitants or property owners need to pay.

Howard, holiday homes form part of the tourist industry of the region but to suggest they should be able to get away with paying tax on their profits so that the pizzeria or café owners can make a legitimate living and pay their taxes is a bit odd.

There are many amenities in the PO that are free to visitors. The beaches, the lakes, the walks, historical sites and picnic areas. Property-owners who offer those facilities to their guests but avoid paying the taxes that maintain them are not playing fair.

Howard Whatmore · Post by **Howard Whatmore** » Thu 05 Jul 2012 22:33

HH wrote:
Howard Whatmore wrote:I should imagine quite a few people on here make a sizeable chunk of their living from people with holiday homes in the area.

They should be encouraged into the area not punished for being here.
I tend to follow Santiago's Analysis, but Howard if they make most of their living from people with holiday homes, providing all parties involved declare their income, pay tax on their gains, there will be no problems!
We only have to look at the Greek problems, the average man in the street paid tax, the ex pats, multinationals, and the Greek tanker barons avoided it.

I am sure Howard, you would prefer Santiago's grasp on the tax changes than the Greek Tanker Barons.

HH, I am just saying that if a lot of holiday home owners decided to up sticks and sell their properties, then it will also affect the people on here who make their living from them.

If you are saying that some of the people working for the second home owners don't declare their earnings or pay their taxes, then it is hardly the fault of the home owners.

blackduff · Post by **blackduff** » Thu 05 Jul 2012 23:14

In my apartment, I pay taxes through the Micro Bic system.

There are several other apartments in the same building who are competing me but these people do not live here in France. They do not pay any taxes here in France, other the Tax d'habitation and Tax Fonciere.

Why are they getting the "Free Ride". Why do I have to pay more, trying to make a few euros.

Anyway, the small tax which has been put into our system, and it's less than I have to pay through the Micro Bic system.

I cannot give any tears for getting them the new taxes. In February I took a bad shot when the change of the capital gains tax. Now I'll never get out of this apartment, without losing money. If it's not an investment, nobody will invest here in France.

Blackduff

Howard Whatmore · Post by **Howard Whatmore** » Thu 05 Jul 2012 23:22

"they should be able to get away with paying tax on their profits so that the pizzeria or café owners can make a legitimate living and pay their taxes is a bit odd"

Santiago, I never suggested that. You seem to have dreamt that up all on your own.
I am on about people who do their changeovers, gardeners and other tradesmen that rely on holiday home owners for a living, the café owners etc. rely on locals and tourists.

Owens88 · Post by **Owens88** » Fri 06 Jul 2012 00:20

Santiago wrote:
Tax Habitation and Tax Foncieres are not taxes on earnings, they are levies to pay for roads, schools, rubbish collection, street lighting, 1€ bus fares, public amenities and such like that all inhabitants or property owners need to pay.

--------

There are many amenities in the PO that are free to visitors. The beaches, the lakes, the walks, historical sites and picnic areas. Property-owners who offer those facilities to their guests but avoid paying the taxes that maintain them are not playing fair.

Santiago

You argue against yourself Santiago. The community-related taxes are paid forby all properrty owners (Taxe D'hab an Taxe fonciere) , as you accepted in the first of those two paragraphs.

Capital Gains Tax is not generally avoided so to load it for 'externals' in order to provide 'social care' benefits only applicable to 'internals' is not natural justice.

However IF, as you suggest, there are 'externals' who own properties in France and make 'income' profits through renting them and IF they pay less tax on those profits than an 'internal' would, then that is also unfair and, although I don't understand how that occurs, I WOULD support measures to level up THAT PARTICULAR playing field.
Sorry for the long sentence

John

Pighunter · Post by **Pighunter** » Fri 06 Jul 2012 13:00

Here is my take on this as a case in point.

As somebody directly affected by this I am not overly concerned in the short term as I pay my taxes both in France and the UK. Any tax paid in France is deductible from the UK tax bill, as there is a double taxation agreement and frankly I'd rather it went to the French! It just means that they will get the bigger share. I have no intention of selling the house any time soon, so the CGT aspect doesn't apply.

That is as long as I am a 40% UK taxpayer.

However having been made redundant earlier this year my rental is now my main income and I will be paying a much lower level of tax in the UK going forward and trying to survive on much less. Then the change will directly adversely affect my income as the French tax bill at 35.5% will be a lot more than my UK tax bill at say 20% and it won't just be a case of the scales tipping in favour of France.

It may well be that I will come to live in France for most of the year shortly, and take up residency in a few years, at which time it will no longer affect me anyway.

In the meantime it will be a blow to someone trying to survive on a low income, NOT the better-off as M Hollande the great socialist suggests!

Richard Head · Post by **Richard Head** » Fri 06 Jul 2012 16:18

If my memory serves me rightly, Sarkozy made a similar proposal but it never materialised. I cannot for the life of me remember why but it could have been that it was seen as "racist" in that it specifically targeted foreigners and therefore would fall foul of civil rights laws.

Richard H.

HH · Post by HH » Fri 06 Jul 2012 16:33

Richard Head wrote:If my memory serves me rightly, Sarkozy made a similar proposal but it never materialised. I cannot for the life of me remember why but it could have been that it was seen as "racist" in that it specifically targeted foreigners and therefore would fall foul of civil rights laws. Richard H.

Richard, that was not the reason the law was dropped!
This law targets Non Res's, who have for years failed to declare in any country, their rental income. If you gain, declare it, there are no free rides anywhere now days.

blackduff · Post by **blackduff** » Fri 06 Jul 2012 16:47

HH wrote:
Richard Head wrote:If my memory serves me rightly, Sarkozy made a similar proposal but it never materialised. I cannot for the life of me remember why but it could have been that it was seen as "racist" in that it specifically targeted foreigners and therefore would fall foul of civil rights laws. Richard H.

Richard, that was not the reason the law was dropped!
This law targets Non Res's, who have for years failed to declare in any country, their rental income. If you gain, declare it, there are no free rides anywhere now days.

I believe that the law which was dropped was for the CGT mostly. Fillion, the henchman of Sarkozy, was the guy who proposed this law. It was dropped and everyone thought this will go away but Fillion came back with a "better" law and it became law on Feb. 1, 2012. And, it hurts a lot.

Blackduff

Santiago · Post by **Santiago** » Fri 06 Jul 2012 18:41

However IF, as you suggest, there are 'externals' who own properties in France and make 'income' profits through renting them and IF they pay less tax on those profits than an 'internal' would, then that is also unfair and, although I don't understand how that occurs, I WOULD support measures to level up THAT PARTICULAR playing field.

I think we all know people who own property rental property here and don't declare the income in either France of their country of residence because it's very easy to do it.

I think we also all know property caretakers who are paid cash and who's income is also undeclared. So that's twice that money has changed hands without the correct taxes being paid.

Nobody likes paying tax but I'm afraid it is necessary if we want to live in a civilised country.

One can argue that foreign investment in property helps the economy but if that comes at the cost of the government losing income and capital gains tax it's not so great, especially if you consider the problems of increased housing costs for locals.

It's hardly like the foreign ownership of a few holiday homes has created a massive boom for pool-boys, key-holders and odd-job men.

PD · Post by PD » Fri 06 Jul 2012 22:02

Santiago wrote:
It's hardly like the foreign ownership of a few holiday homes has created a massive boom for pool-boys, key-holders and odd-job men.

Looking at the post and comments on most Ex pat websites, this included, the Key holders crew, they appear to scratch your eyes out to gain a contract !

There is obviously lots of money, working for ex pats.
Secondary home owners do not seem to be aware that it is a criminal offence in France to pay these key holders types in cash.

opas · Post by **opas** » Sat 07 Jul 2012 06:48

PD wrote:
Santiago wrote:
It's hardly like the foreign ownership of a few holiday homes has created a massive boom for pool-boys, key-holders and odd-job men.
Looking at the post and comments on most Ex pat websites, this included, the Key holders crew, they appear to scratch your eyes out to gain a contract !

There is obviously lots of money, working for ex pats.
Secondary home owners do not seem to be aware that it is a criminal offence in France to pay these key holders types in cash.

This keyholder type sometimes gets paid in cash...........then I declare it

blackduff · Post by **blackduff** » Sat 07 Jul 2012 11:07

I went over the Telegraph or Mail articles but somebody said that Hollande will use this money to hire 150,000 public servants. Does anyone know if they mean "They will hire 150,000 public servants who are tax inspectors?".

Blackduff

Owens88 · Post by **Owens88** » Sat 07 Jul 2012 11:39

Santiago you are correct in saying that taxes should be paid . However increasing taxes on people who do not pay income tax in France is a starange way of doing it. As I have already said CGT gets caught at point of sale. Taxe Fionciere and taxe d'hab are caught at the property. It seems strnge to tackle externals in this way.

However. As British Motorways do not have a toll system I might propose that we have tax collectors at Dover collecting 'access' money from those not carrying a uk road fund licence disk.

blackduff · Post by **blackduff** » Sat 07 Jul 2012 12:48

Owens88 wrote:Santiago you are correct in saying that taxes should be paid . However increasing taxes on people who do not pay income tax in France is a starange way of doing it. As I have already said CGT gets caught at point of sale. Taxe Fionciere and taxe d'hab are caught at the property. It seems strnge to tackle externals in this way.

However. As British Motorways do not have a toll system I might propose that we have tax collectors at Dover collecting 'access' money from those not carrying a uk road fund licence disk.

Haven't you driven in Switzerland's roads without buying a permint affixed on your window? It's the same system which you think should be done in the UK. But, haven't already a system within the UK to collect the taxes on the fuel? I thought that this is the UK version.

And, if I sell my property here in France and buy a nice apartment in London, near Harrods, can I rent this place to some French who would like to vacation in London. This would give me a good income which will not be taxabled in the UK. And, this will not be taxed in France neither. This system is just like which is happening from expats who live outside of France.

Hmmmm! This seems to be my solution of reducing my taxation.

Blackduff

Howard Whatmore · Post by **Howard Whatmore** » Sat 07 Jul 2012 13:28

opas wrote:
PD wrote:
Santiago wrote:
It's hardly like the foreign ownership of a few holiday homes has created a massive boom for pool-boys, key-holders and odd-job men.
Looking at the post and comments on most Ex pat websites, this included, the Key holders crew, they appear to scratch your eyes out to gain a contract !

There is obviously lots of money, working for ex pats.
Secondary home owners do not seem to be aware that it is a criminal offence in France to pay these key holders types in cash.
This keyholder type sometimes gets paid in cash...........then I declare it

I wouldn't really have expected anyone to come onto an open forum and state that they are working on the black.

opas · Post by **opas** » Sat 07 Jul 2012 15:11

My books are available to anyone, so is my expenditure.

I have nothing to hide .......unlike some

GreenHermit · Post by **GreenHermit** » Sat 07 Jul 2012 23:33

opas wrote:My books are available to anyone, so is my expenditure.

I have nothing to hide .......unlike some

Name names !

opas · Post by **opas** » Sun 08 Jul 2012 07:11

What a silly thing to ask!

Richard Head · Post by **Richard Head** » Sun 08 Jul 2012 08:12

Owens88 wrote: As I have already said CGT gets caught at point of sale.:

Correct me if I am wrong. But does not CGT stand for Confederation Generale du Travail, the somewhat left wing French trades union?

Richard Head

Owens88 · Post by **Owens88** » Sun 08 Jul 2012 15:09

blackduff wrote: But, haven't already a system within the UK to collect the taxes on the fuel? I thought that this is the UK version

Sorry No. The Road Fund Licence is what we pay to allow us to have vehicles on the road. UK hauliers have to pay that as well as tolls on french roads if they use them. French hauliers pay nothing to use our roads . So we could have the Swiss system that you suggested or a toll operation on the first roads leaving key ports. UK road fund tax discs to have their own through route. I like it.

Tax on fuel is for the general treasury coffers. As it happens may mainland haulers rarely buy fuel when using UK roads as they fll up before crossing the channel - but that is a separate issue.

And, for completeness sake, what the French call the 'social fund' we call National Insurance (stupid name I agree) wich is only income (or employment) related. Set up your UK rental operation as a business Blackduff. Don't employ anybody and you will only pay tax on your profits.
Same for outsiders as for locals.

blackduff · Post by **blackduff** » Mon 09 Jul 2012 06:49

Owens88 wrote:

And, for completeness sake, what the French call the 'social fund' we call National Insurance (stupid name I agree) wich is only income (or employment) related. Set up your UK rental operation as a business Blackduff. Don't employ anybody and you will only pay tax on your profits.Same for outsiders as for locals.

It certainly sounds like what Hollande wants to collect. He (Hollande) just wants to collect a little tax on the profit.

Blackduff

GreenHermit · Post by **GreenHermit** » Tue 10 Jul 2012 00:05

[quote="blackduff"
It certainly sounds like what Hollande wants to collect. He (Hollande) just wants to collect a little tax on the profit.

Blackduff[/quote]

Exactly, but avoiders watch out! the The guillotine is available !

That is my Pension that you are reducing !

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