French government to propose new tax on secondary homes: report

[PARIS] The French government will propose a new tax on secondary homes primarily targeting wealthy foreigners as it seeks to raise an additional 150 million euros (US$187.55 million) for state coffers, Les Echos newspaper reported.

Socialist President Francois Hollande is under pressure to find extra cash after his government sent a tweaked version of its 2015 budget to Brussels that would bring it more into line with European Commission targets for budget deficits.

The so-called "weekend tax" proposal would target mostly wealthy, foreign owners of second homes in urban hubs such as Paris, Lyon, Marseille and Bordeaux, whose apartments are often left unoccupied for most of the year.

The tax, which would add a 20 per cent premium to the normal residency tax paid by all home owners, aims to put more apartments on the rental market and to shore up funding for local authorities, whose funding has been curtailed amid France's deficit-cutting drive.

Les Echos said the government would aim to present the law to parliament soon. The Finance Ministry declined on Tuesday to comment on the report.

Mr Hollande's unpopular Socialist government faced immediate criticism over the tax - from one of its own cabinet ministers. "I am mostly against it," Labour Minister Francois Rebsamen told I Tele. "When we say that we won't add any more taxes, we shouldn't add any more taxes." Finance Minister Michel Sapin said last month no new taxes or savings measures would be introduced in 2015.

Mr Rebsamen said the measure was designed to free up housing in places like Paris, where he said some 170,000 homes were owned by "rich foreigners" who could afford to pay more tax.

REUTERS