French Holiday Home Tax in Court

French Holiday Home Tax in Court.

The matter of French Social Security on property has been referred to European Court of Justice (ECJ).

What is the French Social Security Charge on Property?

• Introduced 2012
• 15.5% charge on income from property
• 15.5% charge on capital gains.
• Before 2012 only French residents paid
• Now, non-resident owners also pay

Why is France being referred to the ECJ?

If you are resident in France, this contribution to French Social Security then benefits you as you are entitled to benefits.

Non-residents are not entitled and as such pay to a social security system that they cannot benefit from.

This contravenes EU law in that all EU nationals whether you are resident or non-resident should be treated equally.

Comment

The distinction here is that the French have set this as a charge to social security rather than income tax.  In the UK, second property is charged to income tax.  Even capital gains tax is a charge to income tax, so it is not social security contributions i.e.  an entitlement to benefits (or not if you are not resident).

If you already own a holiday home in France, we suggest you will have to wait for a couple of years for the issue to be resolved at the ECJ.

If you are thinking of buying a holiday home in France, you should include these costs as part of your plans or contact us for advice on the French tax and social security system.