It could cost a lot more to rent a holiday home in France due to President Hollande's new plans for tax reform. The tax reform will target tax on rental income for homes owned by anyone living abroad, triggering a rise from 20 per cent to 35.5 per cent. This dramatic increase will strike a blow on British holiday home owners, who often rent their properties out to other British holiday-makers.
60,000 homes will be affected by the tax surge, the French finance ministry has estimated. A large proportion of these are owned by Britons. For example Kate Stinchcombe-Gillies of Holidaylettings.co.uk underlined how "many of the owners who use our website are based in Britain, and will be directly affected by the tax hike." It is expected that property owners will compensate for the tax increase by raising rental prices. Therefore British holiday-goers hoping to hire a house in France are set to be struck hardest by Hollande's plan.
The flexibility and reasonable costs in renting a house in France and enjoying a self-catered holiday has always been a popular option with British tourists. However, this style of holiday could become more exclusive and high-budget should Hollande's plans be put into action.
The President's decision is part of an effort to minimise the country's huge budget deficit. However Kate Stinchcombe-Gillies pointed out how the changes could discourage Britons from visiting France altogether, meaning that "the French economy would fail to benefit from tourist spending." Nonetheless, those wishing to holiday in France will still have the same choice of hotels and campsites, which will not be affected by the tax.
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