Money Transfer News: Council tax for foreign property owners imposed in France

Money transfers to France could be on the rise for overseas property owners in the region due to a new tax law.

A French cabinet has ruled that property belonging to non-residents should be subject to a new council tax.

The tax aims to take around 20 per cent of the property's rental value and is being implemented in order to help the French government solve its substantial budget deficit.

However, for the estimated 360,000 properties owned by people from abroad, the tax is likely to cause more problems than it solves.

Britons in particular could be hard hit due to the poor foreign exchange rate between sterling and the euro.

In this situation, using a money transfer system to send funds to France will help Brits to access the most competitive foreign exchange rates on the market.

This morning (May 19th) sterling continued its decline against the euro. At 11:30 BST the foreign exchange rate was approaching €1.13.

The French finance ministry explained the reasons behind the tax: "Being the owner of one or more second homes implies that one benefits directly or indirectly from local and national public services, like the police, legal system and national infrastructure."

The legality of the new rules has been a topic of debate, with care being taken to ensure that they are not discriminatory towards foreigners.

Indeed, French citizens who have moved abroad and are no longer resident for France for tax purposes could also find themselves making money transfers to cover extra council tax payments if they still own property in the European country.

But those who have paid French tax for at least three years out of the past ten will be exempt from the ruling for their first five years abroad.

Click here to make a Money Transfer to France

Posted by Chris Smith