As one of the world’s “leading inbound tourism” destinations, any move by France to introduce a tax on foreign buyers – like that announced in Spain – could spell disaster for the national economy, a travel expert has warned.
Earlier this month, Spain’s Prime Minister, Pedro Sanchez made a shock announcement that his country it set to begin heavily taxing foreign buyers looking to purchase homes abroad as part of the plan to tackle its housing affordability crisis and high rents.
Now, other European countries suffering from similar housing problems may soon implement similar measures to try to manage the crisis, including France.
But Mike Harvey, managing director at 1st Move International, has a stark warning for France if they do choose to follow in Spain’s footsteps.
Speaking to Express.co.uk he said: “France’s tourism industry is a key pillar of the national economy, contributing around 9% to GDP.
“France could face significant challenges if new property taxes on foreign buyers are introduced,” he warned.
In 2023, tourism revenue in France surged to $68.6 billion [£55.3 billion] – an impressive 110% increase from 2020, despite the fact it is still recovering from the impact of the pandemic. Early estimates for 2024, according to Monaco Life, reveal that France recorded its highest-ever international tourism revenue of €71 billion (£59.9 billion).
“The country’s economy is deeply reliant on international visitors and investment,” explained Mr Harvey.
The travel expert added that in response to the housing crisis, France has already taken steps by passing a crucial law to tighten rules on short-term tourist rentals, which skyrocketed from 300,000 to 1.2 million between 2016 and 2024.
“While this was aimed at addressing housing availability, adding property taxes could further strain the market by making homes less affordable for foreign buyers,” Mr Harvey warned.
While France may not have experienced the intense protests Spain suffered last year, the country has not escaped the curse of overtourism.
The picturesque coastal town of Villefranche-sur-Mer – nestled between Nice and Monaco on the French Riviera – has seen its population drop by almost 40% because of a rise in short-term holiday lets.
Despite boasting charming streets, beautiful beaches and stunning views of the Mediterranean, an influx of tourists drawn to the town’s charms has resulted in a surge in second homes, which now overtake the number of main residences.
A study carried out by the company Touriz, cited in the French newspaper nice-matin, showed Villefranche-sur-Mer has 2,200 main homes compared to 3,200 thirty years ago. The number of second homes is higher, at 2,600.
In the north, meanwhile, the stunning Isle of Bréhat, often dubbed the “Island of Flowers,” the influx of visitors determined to explore its quaint villages, secluded beaches and year-round bloom of hydrangeas, mimosa, and eucalyptus has raised concerns among locals and environmentalists.
Increased foot traffic has put a strain on local resources, while plant trampling, littering and increased demand for water and waste management also pose significant threats to the island’s natural environment.
“In our 2024 Relocation Index, France ranked among the top 10 destinations for Brits, with over 757,000 relocation searches,” said Mr Harvey.
He added: “However, if these taxes reduce the accessibility of French properties, it could slow both international property investment and tourism, impacting local businesses that rely on foreign spending.
“For current property owners, these changes may complicate selling or attracting buyers, ultimately affecting their return on investment.”
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