Dream of buying a chalet or apartment in the Alps? Watch out for new property tax that will hit non-resident owners. The reform is due to be presented to the Conseil des ministres on the 11th of May 2011 and is aimed at compensating for the reduction in revenues from the wealth tax. The tax will apply to any property owner who is not a permanent resident in France. Currently nearly 1 in 10 property transactions in France are to non-residences and in some ski areas a large percentage all purchasers are foreign. The tax will be based on the rental value of the property and will be about the equivalent of a month’s rental. There will also be a new 19% “exit tax” applied to any capital gains.
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The tax will be 20% of the annual rental value of the property. The tax will not apply to rental properties but how this affects holiday rentals is not clear.
The French do extremely well out of tourism and foreign investment in holiday homes which are already heavily taxed. What they do not realise is that this will hit the construction industry and slow down development even more, so revenue will be lost and expended in that direction. Governments are not very clever! We all have to pay taxes and to some extent you would’nt mind if it was fair but owning and holidaying in France has become very expensive over the last couple of years - we rarely eat out and when possible bring as much as we can from the UK - I know other nationalities do the same . To add insult to injury, I am sure any revenue gained will be squandered as normal.
The French do extremely well out of tourism and foreign investment in holiday homes which are already heavily taxed. What they do not realise is that this will hit the construction industry and slow down development even more, so revenue will be lost and expended in that direction. Governments are not very clever!
The French don’t do extremely well out tourism unless the tourists actually spend money. In fact it’s hardly a thriving industry by any measure.
I’m not sure what you think the alternative might be. It’s an extremely modest tax. I’m at a loss to see why those living in France should be paying higher taxes to subsidise second home owners. I’ll pay some tax for the tourist office to do some promotions but I’m not going to pay for extra street lights, roads or anything other infrastructure for people who bought their milk with them.
phil - 04 May 2011 11:55 PM
We all have to pay taxes and to some extent you would’nt mind if it was fair but owning and holidaying in France has become very expensive over the last couple of years - we rarely eat out and when possible bring as much as we can from the UK - I know other nationalities do the same . To add insult to injury, I am sure any revenue gained will be squandered as normal.
Maybe one of the reasons it’s necessary to have a tax is because of foreign owners arriving with their cars stuffed full of everything from bread to toilet rolls who aren’t shopping in the local shops which have now gone bust or making so little profit that their tax take is reduced.
Like a lot of people in Switzerland I’m outraged that our border police here aren’t routinely stopping foreigners arriving with cars and vans stuffed full of furniture from MFI and toilet rolls from Sainsburys. If there’s no benefit to the host country with people arriving not spending money they can stay at home as far I’m concerned.
Having a second home is a middle class luxury item, it’s hardly essential and hardly deserving of state subsidy.
The proposed tax is controversial even in France where it is being linked to Nicolas Sarkozy “scapegoating” foreigners. If it gets some of the empty apartments in the Alps rented during the winter it won’t be a bad thing though, although they would need to apply it to resident owners to make much of a difference.
It will obviously come as a bit of a shock to any owners. I don’t know much about the mechanics of apartment owning, Ian do you really think the Brits arrive with cars full of produces bought down the valley? I thought that was more a Dutch thing (can’t find good cheese in France ).
It will obviously come as a bit of a shock to any owners. I don’t know much about the mechanics of apartment owning, Ian do you really think the Brits arrive with cars full of produces bought down the valley? I thought that was more a Dutch thing (can’t find good cheese in France ).
Down the valley? It’s coming from a Waitrose somewhere in the south east of England mostly. Phil says as much above but I’ve seen them. Buying Ikea furniture in Basingstoke and bringing it out is pretty common as well although a lot of that is to do with not being confident about using local suppliers.
The English apartment owner sat in their studio on an Ikea sofa from Basingstoke, drinking a beer purchased in Calais and eating a bag crisps from Waitrose might be a stereotype but it’s not without foundation.
It’s a simple enough equation though, there’s zero point in tourists who aren’t spending money. In fact less than zero, there’s a certain infrastructure cost that needs covering. If your economy only benefits by building apartments in large numbers then it’s not sustainable and the negative impact of the building itself is huge. The record of large developers is well known for sticking up developments and holding the local authorities to ransom to provide infrastructure for example.
The cold bed thing is different though, it’s a tricky problem. It would be nice to see some places more occupied but again, only if they’re spending money. A foreign owner renting their place a couple of times to someone else who’s not spending money either isn’t going to help anyone. And there’s a libertarian side to that, if someone who can afford to have a place and wants to leave it available for their use they should be entitled to do that without being bullied into renting it out.
I think people should stay at well priced B&B’s in the Swiss Alps personally
I know the lift cos in some resorts complain a lot about cold beds which means the infrastructure isn’t exploited except maybe at weekends. Often the response seems to be to build more apartments rather than Hotels and B&Bs. The whole apartment building thing has been an issue in France since the 1960s where it was really driven by property speculation. The result is that many French people bought apartments back in the day when they are young and are now to old to ski so don’t visit mucn. Because the apartments were not that expensive they don’t seem motivated to either sell or rent.
There’s some impossible economics in some ski stations, a lot of them are operating some sort of pyramid scheme in some way. Funding development by building ever more apartments but not really increasing real available beds.
We’re quick to assume that only the large stations are economically viable but I wonder how sustainable it all is really. And I wonder if the winners will turn out to be small stations able to tap into all year round local demand albeit at a lower level of activity. (& no, I wouldn’t buy Entre Les Fourgs even though I actually know where it is)
Entre Les Fourgs, yes hmmm. La Montagne de Lure was up for sale for a Euro Symbolic around 2005. Four of the Six lifts are due to be removed by Mountain Wilderness volunteers mid-May.
Note that apart from the problems of snow cover an issue was the fact that the lifts needed their 30 year inspection and were not up to standards. This has killed a number of other resorts over the last few years as EU and national safety regulations have become more stringent. I suspect Entre-les-Fourgs and similar areas need some kind of subventions from the council to operate.
My guess is that you’ll start to see conditions attached to planning consents for lifts in some areas that insist on plans for their later removal at the operators expense, some sort of bond possibly.
I’d not give 50 cents let alone a euro for anywhere that couldn’t get a bike or a pedestrian up the hill when there’s no (skiable) snow summer or winter. One of our local stations, Moléson, are masters at the non-ski business, the only times I’ve struggled to park are when there’s no skiing but everyone’s walking or mooching around.
We were in Paccots at the weekend and the village was really busy, I’ve never seen that many people there skiing and Paccots lacks uplift for bikes & pedestrians. I’ll bet if they could trade the all the drags for one chair they leap at it.
If we get winters with poorer snow, more winters like this one, then some stations will go under but even with more snow some would have anyway for all sorts of other reasons. But those that have good non-ski business will probably do OK. If I were a bank I’d not lend anything for a ski lift but I’d consider it if it was a lift with a bike rack.
I guess middle class foreign second home owners are an easy target. However money spent on taxes will not help the local economy, we’ll have less to spend in resturants and in other local shops. By-the-way not eveyone who owns an apartment in France (we have one in Les Houches) lives in the south of england, we live in the lake District and so shopping in the UK isn’t an option when we have to fly to Geneva. The other issue for ‘cold’ beds is that we rent our apartment out (I don’t like the idea of an empty asset, or a shut up building - we know how this feels to locals living in the Lake District) however in the last few years filling the apartment has become increasingly difficlut due to the economic situation, the value of the euro and snow conditions. What the French Government should do is promote these areas more and make them more attractive to touriests, thereby helping the local economy. If they spent the new tax on that, then I wouldn’t mind paying it - but somehow I suspect it will just be spent on propping up an extemely expensive civil service.
I’ve seen a German resort on a YouTube video where the cyclists were using a draglift to get to the top, must be specially adapted and the track would have to be good, not too steep.
One thing I learned from our local resort is that just having grass doesn’t mean you can ski on 30-50cm of snowfall. They explained that the last couple of years have been problematic because the ground at 1000m wasn’t frozen when it snowed so they could not bash the snow without it lifting up on the rattrac tracks. This meant a rotten base for the ski season. My local resort has 2 sectors, one has snow canons and there they were able to create a good base with artificial snow which took them right through to March--- at cost mind. I think it is something like 0.75 - 2.00 euros / m3 depending on the water source (reservoir/mains) Given they laid down a 20cm layer over some 5000msq of pistes that would have cost at least 2000 euros and probably more (if my costs are right) for the initial cover. Ok not much but maybe a significant cost for a micro-resort. They reckon the installation costs 5 years turnover.
I’ve seen a German resort on a YouTube video where the cyclists were using a draglift to get to the top, must be specially adapted and the track would have to be good, not too steep.
I think I’ve seen those trottinette things being pulled up as well, you see a few go-cart things as well. Being towed up some drag lift lines wouldn’t be for the faint-hearted though
davidof - 05 May 2011 01:50 PM
Ok not much but maybe a significant cost for a micro-resort. They reckon the installation costs 5 years turnover.
The adverse impacts of snow cannons are another story altogether. I read a fairly incredible blog post only the other day claiming that negative impacts were entirely unproven and this was from someone who actually lives in an alpine village and could have observed the effect first hand. If we are going to start to seeing poorer winters I hope we get some really robust laws to limit the use of cannons a bit (in fact a lot) because I think, left to their own devices, companies won’t limit themselves.
This is my first post on here, so I might make a hash of it!
do you really think the Brits arrive with cars full of produces bought down the valley? I thought that was more a Dutch thing (can’t find good cheese in France ).
In the Chamonix valley there are numerous Brits (permanent residents and 2nd home owners alike) that buy food online at Tescos (and Waitrose too I believe) in the UK and another transporter brings it here for a percentage of the value of the goods. For a community that has the ongoing problem of vehicle fumes and the anti-truck lobby re the Mont Blanc tunnel, it doesn’t seem very eco-friendly to me. On top of that, it certainly doesn’t support the local economy.
Having said that, having lived here for 9 years I find it very expensive for every day living!
pretty common I think, when we lived in Germany there was a store in town selling English stuff bought over in a transit (I presume) at huge markups. About the only thing we have from the UK is tea bags and gravy granules which I bring back when I’m over there. Odd though that people who’ve chosen an ex-pat lifestyle need bacon and walkers crisps.
The best I heard was an American bringing back American processed cheese to France, although to be fair you certainly can’t find an equivalent French product.
Although I’m guilty of importing things like bikes and skis from France & Germany into Switzerland, the local dealers are so expensive you can buy stuff cheaper in Germany even without the VAT reclaim.
I think this tax sounds does like scapegoating foreigners, but when you look down onto Chamonix its like a large elongated city stretching along the valley. When you travel along the bottom of the valley every other (or more) £1m+ chalet is all shuttered up. Its the same in the apartment blocks, one I lived in, in Chamonix sud was about 20% occupied all winter. Totally empty buildings are way worse than car boots full of groceries. Maybe an empty property tax would help.
I really can’t see how comments about “scapegoating foreigners” can be justified. AFAIK French owners, or those resident in France, pay wealth tax on assets like second homes. Foreign owners, where the value is less than €750,000, aren’t paying that tax.
I think you’d see hear people complaining about an empty property tax as well, in a winter like this people might be struggling to get rentals at all.
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