Wednesday, 22 June 2011

Le U-Turn


 I have a small property in France and Mr Sarkozy recently came up with a plan to extract more money from me, and thousands of other people with a ‘holiday home’ there. His plan was to effectively double the local property taxes on any property owned and used part time by people living or working outside France on the basis that because they had no income in France they avoided french income and wealth taxes.

Now I can understand that some people might think that if you can afford a second house you can afford extra taxes, and holiday homes should be discouraged, but actually that’s not as clear cut as it would be in the UK. Having worked in jobs with no pension entitlements I have saved money all my working life towards retirement. When Brown started stealing the growth and the bankers extracted their bonuses, then the credit crunch mangled the pot still further it was time to think laterally. So the money went to France where it might hopefully still retain some value and Brown couldn’t reach. Now having retired the property will have to be sold, and while it’s not been the best financial investment it’s fared no worse than the stock market over the past 5 years, and at least it has provided some great times away and some fascinating insights. If the Euro collapses in a heap then I’ll look very silly, but so will every other person with small personal pension savings.

 In some rural areas of France property, particularly stuff needing renovation, is ludicrously cheap by UK standards - look at this or this and often there are many empty houses. This is partly because of the Byzantine french inheritance laws which lock property into multi ownership and partly because many french people work in jobs in the towns, many of which supply accommodation like a town flat, and hence they may keep a family property and live elsewhere or they buy a property that remains essentially unused until they retire to it. So the usual UK cries of ‘you must be rich’ or ‘you are blocking locals from housing’ simply don’t apply in these areas.  Indeed if the english, germans or dutch buy french property most of the locals are delighted, it brings deserted and unused property back into use and helps the local economy, even part time occupation is better than none.

Anyhow, Sarkozy’s plan was all sorted and has had people worried, until someone pointed out that it was discriminatory under EU rules, and apparently it even breaches french rules for people with dual nationality. So the U-turn has been announced.   

For those who think Cameron is unique in not understanding the EU’s power and is a world leader in half-arsed stupid ideas that are announced without having been thought through or properly researched we now know he has competition.

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