New tax could cost Britons who own French holiday homes thousands of pounds

British people who own holiday homes in France could be hit by a new tax that could cost them thousands of pounds a year.
The French Government is planning to introduce a property tax on any home that is rented out for part of the year, which could affect up to 200,000 Britons who own a second home in France.

Sign of the times: The new tax could affect up to 200,000 Britons who own a second home in France

Holiday home owners who seek to make money by renting their property out when they are not using it will be charged 20 per cent of its annual rental value.
However, anyone who rents their property out for the whole year with a local letting agent will be exempt from the new tax.

The new levy is part of an overhaul of the property tax laws by French President Nicolas Sarkozy’s government and is expected to come into force on 1 January 2012.
Holiday home owners already pay two taxes to the French Government: the taxe fonciere, which is paid by the house owner and the taxe d'habitation, which is paid by those who live in it.
But Government ministers have argued that second home owners should help pay for French public services, such as the maintenance of roads.
A spokesman for the French finance ministry said: ‘Being the owner of one or more second homes implies that one benefits directly or indirectly from local and national public services, like the police, legal system and national infrastructure’.
However, legal experts say the tax could be viewed as discriminatory towards foreign owners of second homes and might face a legal challenge in the European Court before it becomes law.
Source http://www.dailymail.co.uk/