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France faces tax rise

Catherine Deshayes

Nicholas Sarkozy's introduction of an increase in tax on investment revenue could affect international investors who rent out their holiday or second homes in France.

A holiday home in France is a popular choice for many Brits, and renting the property out to visitors is a good way to boost income.

Now, Sarkozy's one per cent tax increase, which will be applied to property rental income as well as other investment income, could impact upon international investors.

It will bring the total tax rate on investment revenue to 30 per cent.

According to The Times newspaper, the tax rise, which is expected to pull in more than £1 billion per year, has been designed to help finance a French welfare plan.

The welfare plan is a back-to-work programme called the Revenue de Solidarité Active, which will aim to ensure that the income of welfare claimants increases once they find employment - at present some people are better off financially if they are claiming benefits than working in a low-paid job.

The scheme is rumoured to be costing around £6 billion per year.

Opponents to the scheme feel that it contradicts Sarkozy's efforts to attract back French tax exiles from, amongst others, Britain, Switzerland and Belgium.

To check out French property for sale, visit france.themovechannel.com/