The French equivalent of council tax, ‘taxe d’habitation’, could rise by up to 20 per cent on second homes under new proposals set out by President Hollande’s government reports the Telegraph.

The move would affect French as well as overseas property owners – many of whom are British.

But the changes, which form part of France’s 2014 supplementary budget, will not affect the whole country.

30 areas known as “zones tendues”, where there is a serious shortage of housing, are likely to be affected by any new tax hike.

Along with Paris, the tax may be levied on properties on the Atlantic and Mediterranean coasts, the south-west and the Alpine region.

The areas affected are popular with second homeowners from overseas, including many Britons.

The new tax could bring in 150m euros to local councils – although they will be able to choose whether or not to levy the charge.

Are You Affected?

Those who rent out their property are expected to be unaffected by the new tax as it is planned that only unoccupied homes will be targeted.  The article cites Graeme Perry, French Property expert with Sykes Anderson Perry as saying “In order to avoid this charge, [Britons with second homes in the targeted zones] may want to consider letting out the property, either permanently to tenants or holiday homes for tourists.”

If you are likely to be affected and are considering renting out your property for the first time, make sure your holiday home insurance provides protection when the property is let to tenants. Click4quote.com can provide holiday home insurance for properties located in France which can either be used as a holiday rental or for use by friends and family whilst you are not there.  Why not get a quote online today and see how we can help protect your holiday home investment