French MP seeks new way to pause second-home sales capital gains tax

A plan to temporarily halt capital gains tax (CGT) on sales of second homes to encourage owners to sell and free up their properties to be main homes is to be re-presented, an MP says.

Daniel Labaronne (Indre-et-Loire) said: “We are in a housing crisis and prices are generally too high.

“The idea was to propose a radical idea to encourage second-home owners to sell so we would have a lot of properties put on the market, which would significantly affect prices.”

Read more: Proposal to pause capital gains tax on second homes in France

New housing bill expected in spring

It was not adopted in the 2024 Finance Law but an expected new bill on housing in the spring will present a second opportunity, he said.

Asked if many colleagues had supported it, he said: “A few, but not everyone has a comprehensive understanding of the overall economic picture.

“There are certainly some people who hang on to properties, mostly for tax reasons.”

Usually, owners must wait 22 years for progressive reductions to remove a CGT liability (30 years for social charges).

Read more: Sale of French second home causes capital gains tax worry

‘Too many empty French-owned second homes’

Mr Labaronne was originally calling for a total tax and charges exemption in 2024 on properties sold to buyers who wanted to live in them as their own main home or to rent them out long-term.

However he said he is open to discussion as to whether such an exemption should be made more long-term.

Mr Labaronne, from President Macron’s Renaissance party, said too many people own properties that they leave empty for much of the year.

He said he was not necessarily thinking of foreign owners, for example, who have second homes in the south-west or on the west of France, but more French-owned second homes.

Read more: Five-year visa plan for second-home owners in France advances

“We have no interest in making our foreign friends flee. They contribute to the economy of France too,” he said.

“We should look more closely at the reasons why some properties are used as second homes, as some people have good reasons not to occupy their property full-time – for example, people in the military who are stationed abroad. Nationality should also be another factor.

“If the owner has professional reasons, or they live abroad, perhaps they should not be subject to the taxe d’habitation surcharge that exists in certain under-pressure housing areas.”

He proposed another amendment, also not adopted, regarding ‘vacant’ properties – homes that are unused and not furnished – where local councils would have been asked to liaise with the national housing agency to identify these and speak to owners to persuade them to sell.

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