Own a Ski Property in France? What Tax Changes can we Expect from Macron?
Unlike Hollande who saw taxes increase, the campaign promises of Macron were all about tax reductions for individuals and businesses in France. What does this mean for those of us with ski property and businesses in France? Let’s find out.
The Impôt de Solidarité Sur La Fortune (ISF) is incredibly unpopular in France, leading many wealthy French individuals to leave the country. Macron, keen to stop taxing forms of wealth that contribute to the French economy, wants to turn it into a property-specific tax. This means that high-value properties will be taxed so that other assets such as savings and investments are protected. This is likely to start from 2018.
Taxes on Investments
Investment income – i.e. dividends, interest and other capital gains – are currently taxed at the progressive rates of income tax and can be as high as 45%, with another 4% added over €500,000 plus social charges of 15.5% (woah!). Macron has suggested he wants to reduce taxation on investment income to be more in line with the European average of around 38.8%.
Macron has pledged to increase the income thresholds for Taxe d’Habitation. Currently, about 30% of the French population are exempt from paying the tax because they have a low income, or they are 60+ and their income does not reach a certain level. The increase to the income threshold means the exemption will now extend to 80% of the population – or around 18 million households.
This transition is set to take place over three years from 2018-2020 and will cost the government around €10 billion per year.
Over the next five years, corporation tax will be reduced from 33.3% to 25% to attract more foreign investment into the country.
Energy Tax Credit
The ‘Credit d’Impôt Transition Energétique’ will give a 30% upfront ‘refund’ to those who choose to use more environmentally friendly sources of energy – great for those who are interested in solar or wind energy when building their ski homes.
Other Planned Changes
- More flexibility on the age of retirement
- Minimise differences in pensions of government and private sectors
- Encourage employment by amending the notoriously stringent labour laws making it easier for small businesses to hire staff
- Reduce public spending by €60 billion by cutting 120,000 public sector jobs
- A €50 billion investment plan to boost the economy
Currently these are just projections, and there will be more visibility on upcoming changes over the summer - watch this space!
WHILE YOU ARE HERE...
Looking for a ski property? Start your search here!
Need help with a mortgage to buy a property in the French, Swiss, Austrian or Italian Alps? See our mortgage tips and advice from experts.
Want to know which ski resort is best for your ski property purchase? Check out our ski resort guides.
Need to swap some Pounds for Euros? All you need to know about currency exchange.
Want to know about buying a ski property in the Alps? Get the lowdown with our buying guides.