*New CGT rules on sale of second home in France

The French government have announced plans to change the rules governing the calculation of capital gains tax (CGT) on the sale of second homes, according to a report in today’s LeParisien.

The most important part of the legislation concerns the abolition of capital gains tax relief for people owning property for more than five years. Under current rules, 10% relief can be claimed for each year of ownership from years six to sixteen, reducing CGT to zero after that period.

This current system is to be replaced by a new calculation based on the rate of inflation during the period from initial purchase to sale. Full details have yet to be published on how excatly this will be calculated.

The new measures are expected to generate 180 million euros in 2011 and 2.2 billion euros in 2012 as part of the French governments austerity plans.

Source: Global edge

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