There’s good news for second-home owners in Nice and Cannes, with the mayors of both cities declaring they will not implement a hefty tax increase as part of the new national budget. Opponents say the controversial bill won’t free up housing, as the government intends, but rather may hurt the struggling property market.
The increase will be 20% and charged on the annual Tax d’habitation.
Due to the large numbers of second homes in the Côte d’Azur, cities such as Nice and Cannes would be significantly affected by the new property tax. However, as the application of the tax is down to the municipal authorities, some are choosing to opt out.
“I have not applied this measure to Cannes; I think it would be extremely detrimental,” said Mayor of Cannes David Lisnard. And, it appears that Nice is following suit. A spokesperson for Mayor of Nice, Christian Estrosi, today said: “The City of Nice is categorically opposed to this tax.”
Both announcements came after Finance Minister Michael Sapin confirmed yesterday that affected communities are allowed to simply refuse to apply the tax if they wish. “The principle is simple, the tax goes into the funds of the community; if they do not want the tax then a simple vote will be sufficient to ensure that it is not applicable in that area,” said the finance minister, adding, “the State is not forcing this upon anyone.”
The bill was included in amendments to the supplementary budget for 2014. Communities have the option to enforce the tax increase of 20% upon owners of furnished accommodation which is not their principal residence. The aim is to encourage the huge numbers of predominantly empty second homes to be “freed up” for others, in areas of housing shortage.
The taxe d’habitation increase concerns 105 areas, which comprises 1,150 towns – if the respective authorities don’t reject it.
There are some exceptions to the tax for second-home owners in certain circumstances. For example, those who are forced to own a second home near where they work, as well as those of “modest means” who settle permanently in a nursing home or institution of long-term care, will be eligible for a rebate, according to a local newspaper. This will also be the case for those who can prove that unpreventable reasons are stopping them from using their second home.
Opinion has been divided on the tax, with many doubting whether it will impact the housing shortage. “Do you think for one moment that this measure will help to free up some of the stock [of empty housing]? … Do you think that people, for 300 to 400 euros per month, will even temporarily rent out their apartment?” the vice president said.
The most severe effects are expected to be felt in the real estate industry, with concerns that fewer people will consider purchasing property in France.
So, contact me, Jackie Pressman of French Riviera Property Search, and I will arrange viewings for you in areas where this tax has been rejected.