In a possible sign of how the recent election of a socialist government in France could accelerate flows of wealthy individuals to the UK, the Daily Telegraph reported that foreign owners of holiday homes in France will pay higher taxes.

There are an estimated total 360,000 non-resident second home owners in France, the publication said, of whom around 200,000 are from the UK. Popular areas include the Dordogne region.

The French government has announced total tax hikes to collect €7.2 billion ($9.2 billion) as the country wrestles with a large budget deficit. The government said it will hike taxes on foreign-owned second homes. Tax on rental income will rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent.

The newspaper said that the UK government will check to see if the tax rise breaches the rules under the European Union’s Single Market system, which is designed to prevent competition from being distorted by tax and other national regulations.

Also controversially, a rise in tax on rental income will be retrospective, from 1 January this year, while the capital gains tax hike takes effect form the end of July, giving owners little time to prepare, the newspaper said.

Red carpet

UK prime minister David Cameron recently annoyed French politicians and commentators by saying the UK will "roll out the red carpet" to wealthy French citizens and companies who wanted to emigrate and pay their taxes in the UK. French president Francois Hollande had promised, during his May election campaign, to slap a 75 per cent top tax rate on high earners.

Already, some wealth managers and lawyers have told sister publication WealthBriefing they see signs that more wealthy French people will try to emigrate to the UK.

Under present French rules, owners of holiday homes pay two other taxes to the French government: the taxe fonciere, which is paid by the house owner and the taxe d'habitation, which is paid by those who live in it.