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French government relaxes rules on expat second home taxes
| Published: | 2 Jul at 6 PM |
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Long-stay expats owning second homes in France can now relax as the government’s recently announced tax grab will now be subject to less onerous rules.
Previously, British home owners with holiday homes in the country were able to claim capital gains tax exemption after 15 years’ ownership on the sale of either their UK properties or their French holiday homes. The bar was raised to 30 years in February 2012, with the draconian rule change preventing many long-term house owners from selling either of their properties without losing a high percentage of their profits.
According to Spectrum IFA Group’s Graham Keysell, one of his clients had been forced to withdraw from the sale of her Devon apartment, purchased 25 years ago, as she would have been liable in both countries, giving a total of over £70,000 capital gains tax. She is, said Keysall, very relieved at the news that President Hollande has now reduced the limit to 22 years.
Hollande is expected to have made the reduction due to the damage to the French property sector caused by a large number of second home owners taking their properties off the market. At present, many retired expats are looking to sell and return permanently to the UK as they feel they are too old to take regular trips and their adult children were not keen on taking on properties in France.
However, according to chair of the Sovereign Group Howard Bilton, expats selling their French holiday homes may still be at the mercy of the UK taxman. Many, he said, do not realise that any profit on the sale will attract UK capital gains tax.
Previously, British home owners with holiday homes in the country were able to claim capital gains tax exemption after 15 years’ ownership on the sale of either their UK properties or their French holiday homes. The bar was raised to 30 years in February 2012, with the draconian rule change preventing many long-term house owners from selling either of their properties without losing a high percentage of their profits.
According to Spectrum IFA Group’s Graham Keysell, one of his clients had been forced to withdraw from the sale of her Devon apartment, purchased 25 years ago, as she would have been liable in both countries, giving a total of over £70,000 capital gains tax. She is, said Keysall, very relieved at the news that President Hollande has now reduced the limit to 22 years.
Hollande is expected to have made the reduction due to the damage to the French property sector caused by a large number of second home owners taking their properties off the market. At present, many retired expats are looking to sell and return permanently to the UK as they feel they are too old to take regular trips and their adult children were not keen on taking on properties in France.
However, according to chair of the Sovereign Group Howard Bilton, expats selling their French holiday homes may still be at the mercy of the UK taxman. Many, he said, do not realise that any profit on the sale will attract UK capital gains tax.
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