Holiday Club Offers Alternatives for Alpine Home Owners

Posted on 23 August 2012

People who own Alpine properties in Switzerland and France are being advised to look for alternative ways to use their second homes. This would help them avoid higher tax charges brought in through new legislation. One way forward is to use the services of a holiday club, and to simply swap homes with another property owner. This would enable the owner to ski in a different resort or even a different country. No tax would be applicable as no money would change hands.

Several months ago a referendum vote in Switzerland was successful in bringing in a new law restricting the number of second homes in each municipality or commune to just 20% or less. The reasoning behind this new law wasn’t too penalise foreign buyers, as around 60% of second homes in Switzerland are owned by Swiss nationals. Instead it was more about trying to restrict the expansion of tourist resorts within the Alps.

At the moment there are around half a million holiday homes in Switzerland equating to around 12% of the housing stock. However in Alpine resorts such as Valais, Ticino and Grison, this figure for second homes rises to between 60% and 80%.

In France the change is a straightforward tax increase on rental income that is now being backdated to the beginning of the year. Holiday home owners within the European Union could face a 15% increase on the tax on rental income, while those living outside the European Union could see their taxes rise to nearly 50%. Changes to capital gains tax in France have also increased the time you need to own a property from 15 years to more than 30 years in order to be exempt.