How Macron destroys the dream of owning a holiday home in France: The British are threatened with a 60% increase in property tax

Brits with second homes in France could be choking on their croissants when faced with the latest property tax bill in the coming weeks.

The French government is raising property taxes for owners of holiday homes in popular tourist areas.

Some might find their bill has risen by 60 percent as President Emmanuel Macron cracks down on second homes in areas facing housing shortages.

There are two main property taxes in France: the taxe foncière and the taxe d’habitation. The Taxe Foncière is a property tax and is paid by the owner of a property, regardless of who occupies it.

The Taxe d’Habitation, a housing tax, is paid by the tenant. It is similar to the local tax in the UK and is spent on community services. Last year the average tax was €772 (£660) for a house and €941 (£800) for an apartment.

Townhouse: Kate Cherry and husband Matt are braced for drastic tax hikes on their four-storey estate in Occitania, southern France (pictured)

From 2023, this tax will no longer apply to owners of a single apartment.

However, it still applies to second homes and other properties and also applies to Brits owning a second home in France.

A surcharge of between 5 and 60 percent could be levied on this tax in 2024.

Originally, the surcharge was limited to 1,136 municipalities in major cities and tourist spots, where last year areas like Bordeaux, Lyon and Biarritz increased property taxes by 60 percent. In Paris, for example, the city council has decided to increase the property tax by 51.9 percent.

Now the French government has given another 2,263 rural areas the opportunity to increase the tax by the same amount.

“Tax rates for 2024 haven’t been released yet, so it’s still a very gray area for homeowners.”

Towards the end of the year there should be clarity, but there is still a lot that is not yet known or whether taxes will rise again at some point,” warns Christophe Du Tertre, specialist at FranceTax Law.com.

One thing is for sure though, property taxes for second home owners are rising in France and this will impact the thousands of Brits who own holiday homes there.

In Brittany, for example, 156 local authorities have been given permission to increase residence taxes by up to 60 per cent, where around 12 per cent of properties in the region are second homes. An estimated 8,900 Britons could be affected by the tax increase.

Townhouse: Kate Cherry and husband Matt

In the Jura region of eastern France, 52-year-old Lebby Eyres has owned a second home with her French husband Fred, a television producer, for 11 years.

Hailing from neighboring Burgundy, the two often stay at the house when visiting his family with their two teenage children.

The couple bought the four-bedroom property in 2012 for €165,000 from an 86-year-old woman who had joined two houses into one. It’s still treated like two houses, which means the tax burden will be higher.

The Taxe foncière for the house is set to rise by 11.5 percent this year from EUR 1,126 to EUR 1,257 per year.

The couple also pays a Taxe d’Habitation of around €1,100 per year, for a total property tax of around €2,000. They assume that their total annual property tax burden will increase to around 2,500 euros.

“It’s a double whammy.” “We pay taxes annually, so getting two big bills at the end of the year is quite a hassle,” says Lebby, executive director of The Health Lottery.

However, she adds that the house is not an investment.

“We bought it so we could see family and the half-French kids could learn about French culture.” Maybe one day we’ll retire here. “We would simply have to take any tax increases lightly.”

Kate Cherry, 46, lives in Hertfordshire and owns a four storey town house in Occitania, southern France. Kate, who lived in the area when her parents moved there in the 1990s, bought the property with her husband Matt for €350,000.

Context: Lebby Eyres (pictured at her second home in the Jura) expects her total annual property tax bill to increase from €2,000 to around €2,500

It is divided into four apartments, two of which are rented. Another is used by Kate while the other is used by her parents.

Kate only pays residence tax on the apartment that will be her main residence during her stay in France. Last year she paid 729 euros. Your taxe foncière bill in 2022 was 3,611 euros, about 300 euros more than the year before.

Kate, regional director of business networking organization The Athena Network, says there are still doubts about how much the property tax burden on second home owners will rise. She expects her bill for the coming year to arrive this month.

“I’ll wait and see what our village does in terms of raising property taxes because the community is heavily dependent on tourism and there are many businesses that make most of their money in the summer.”

“I understand that they have to make money, but of course I don’t want it to increase too much,” she says.

Rising property taxes are another blow to Britons who are already struggling to spend time in their holiday homes in Europe.

British citizens are not allowed to stay in EU countries for more than 90 days in any 180-day period.

Under pressure: It is estimated that around 60,000 Britons own a second home in France, down by a third from around 90,000 in 2012

Around 809,000 Britons own second homes, according to the English Housing Survey. Around 60 per cent are in the UK, up from 48 per cent a decade ago, suggesting that more Britons are now preferring holiday homes in their own country.

“Since Brexit, we’re seeing fewer British buyers because there are restrictions on how long they can stay in the country,” says Alex Balkin, head of Savills’ French Riviera division.

It is estimated that around 60,000 Britons own a second home in France, down by a third from around 90,000 in 2012.

Susan and Chris Beesley recently sold a house in France due to increasing bureaucracy and limited residency.

Her chalet in the French Alps also included a self-contained apartment on the same property.

Susan and Chris stayed in the apartment during the ski season while they rented the chalet out to vacationers. They sold the apartment in 2021 for 300,000 euros and the chalet in 2022 for 695,000 euros.

“We loved our accommodation but were impacted by the pandemic which had a negative impact on bookings.” Also post Brexit we were no longer able to stay out all season and run our chalet business.

“We decided to sell the money and invest the money elsewhere,” says Susan, 68, a former business consultant who advises others on how to earn an income in retirement.

The couple paid around 1,500 euros a year for the Taxe d’Habitation and 1,950 euros for the Taxe Foncière.

“I really think it’s good to own property abroad, but you have to go with your eyes open and understand how the rules work and that they can change depending on the government,” adds Susan.

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