The new French president Francois Hollande Recently announced that non-French residents would have to pay an increased level of tax on any rental income they receive. The rate will be raised from the present 20% to 35.5%, and this tax will be backdated to 1st January 2012.

Capital gains tax is also set to rise from 19 to 34.5% at the end of this month.

Any rise in tax for foreign owners of French property tends to cause concern, not least because some see it as hostility towards foreign ownership of property, particularly if that property is only lived in for part of the year. But given the fact that very few owners of French holiday homes actually rent their properties out, the new tax is not likely to trouble many people.
Experts say that even those who are subject to the new tax will just see the tax they once paid to Her Majesty’s Inland Revenue (or the tax authority of the owner’s home nation) go instead to the French tax authorities. It is important to point out that obtaining conclusive local advice on these matters is the best way to be sure of your tax position.

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