French second home tax law ruled illegal

Earlier this month, the European Court of Justice ruled that the extra 15.5% tax (capital gains and rental income) British and EU second home owners are liable to pay if they sell or let their French properties is illegal.  This was because EU law declares that a resident of a member state must only contribute to that member state’s social security system and any other social charge is therefore deemed to be double taxation and illegal.

French President Hollande introduced this extra tax in 2012, aiming to “remove an unjustified tax advantage” given to non-residential second home owners.  It was hoped that the introduction of this social charge would bring an estimated annual tax revenue of €250m (£178m).

The Telegraph has reported that the ruling will bring joy to the 200,000 Britons (and thousands of other EU residents) who have had to pay the extra levy, as the ECJ has ordered the French authorities to reimburse them for their losses.

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