France boosts property market with bon voyage to social charge

The popular resort of Val d'Isere, France

The fee, charged in addition to capital gains and income tax, was introduced in 2012 and applied to both domestic sellers and non-French residents selling or letting their properties. The 15.5 per cent charge, though, was hailed as "illegal" by legal experts.

David Anderson, Solicitor Advocate, Chartered tax adviser and barrister (unregistered) at Sykes Anderson Perry Limited, Solicitors and Chartered Tax Advisers advised owners to write to their notaire asking for a refund last year, as a court case investigated the legality of the tax for overseas property owners.

Now, the Court of Justice of the European Union (CJEU) has confirmed that the charges cannot be applied to individuals subject to social security regimes of another EU country.

Loic Raboteau, of Francophile Legal Consulting Ltd, tells OPP Today that the ruling is likely to stimulate international demand for French property: "This reversal will encourage property owners to sell and therefore free up the market. It will encourage non-resident to invest, as social contributions amount to 15.5 per cent of the sale proceeds!"

"It means no capital gains tax after 22 years for second home property owners. This combined with strong sterling, record low mortgage rates and declining prices, means the French property market is very attractive today."

The ruling also follows reports from many French estate agents of rising interest from foreign buyers, particularly in ski property, thanks to the weak euro and the relative rise in costs for Swiss ski property.