The French government has announced new capital gains tax (CGT) rules which will provide a welcome relief for second home owners in the country.
Earlier this week, President Francois Hollande stated that the required time of ownership before a secondary property becomes completely exempt from CGT will be 22 years. Only last year the previous French government had raised the limit from 15 to 30 years, a decision that Hollande labelled “a mistake.” The new rule could come into force by the beginning of September.
What’s more, an exceptional allowance on second homes or property for rent will also be introduced next year.
“What I want is not to make a gift to the owners. What I want is for those owners who want to sell their property, others who want to buy them, can do,” said the President in an interview with French media.
Property sales in France fell significantly last year, with official figures showing that property sales were down by 12 per cent from the previous year, to around 709,000 completed transactions.
What’s more, it is estimated that sales will fall by a further 8.5 per cent to reach just 600,000 by the end of this year. The changes made to the CGT tax rules made in February 2012 have been blamed in part for this fall in sales.