Tax on holiday homes in France scrapped

News update - The proposed tax on holiday homes in France has been scrapped by the French government. The decision to scrap the tax was taken, we understand, over the weekend at a meeting between President Nicolas Sarkozy and his Minister, François Baroin.
The government had clearly not thought through very well. It certainly smacked of a last minute concept, thrown into the mix of the finance bill during its passage through parliament in order to help make the sums add up on the reduction in the wealth tax.
Many commentators were of the opinion that the new tax would have infringed EU regulations, and was also contrary to a number of taxation treaties France has in place with other countries.
According to the French government, 363,000 owners would have been liable for the tax, of which around half would have been UK citizens.
There was a huge misunderstanding about just how much it would cost. We received many enquiries ! In fact the impact was going to have been pretty small. For the vast majority of those affected by it, the tax was never going to cost more than a few hundred euros a year.

Reports, reports & more reports

Most readers will know that in France when you buy a property, you receive a dossier expertise made up of numerous reports carried out on the property. Very similar in fact to the HIP reports introduced in the UK.

I have never been a great fan of these for reasons I will outline below. But clients do sometimes misunderstand them and get very wound up about their contents.

A few examples :-

Energy reports (DPE) – whilst accepting the concept behind these reports, if you want character (such as exposed stone walls), you are never going to get a property featuring highly on the rankings of this report. You shouldn’t need a report of this detail to learn that by adding more layers of insulation and installing double glazing that you will improve the energy rating of the house !

Electrical reports – again, I am all for highlighting where there a safety issues, but the standards to which properties are now measured are for new-builds, not properties that were rewired 15-20 years ago with perfectly safe systems, that work.

Drainage reports – we believe that over 80% of rural properties don’t have a fully conforming fosse septique. The standards change on a regular basis, so one installed 5 years ago, may not meet today’s compliance standards. Often it is just a case of adding a new grease trap, or something else minor, but a “damning report” sets the alarm bells going for a potential buyer.

Woodwork reports – principally seeking termite activity, which is a real problem. We have just lost one sale where the report mentioned carpricornes, (a form of beetle), and the buyer got cold feet. We subsequently found out that the capricornes were not active (i.e. dead) and were actually old traces in old beams removed from the house and stored in an old barn away from the house on the floor. But the damage had been done, and the buyer had pulled out !

The reports are useful, if used correctly. They can be a good tool to negotiate a reduction in price for example. But I would hardly ever find these reports a good source upon which to base a decision to buy or not.

Bone weekend.