How do taxes work for non-French owners when running a gîte?

Running a gîte, explained.

9 August 2020
By Connexion Journalist

Renting out a property as a gîte is a popular way of making some extra money for many English-speakers in France. However, there are official rules and regulations that you should bear in mind.

Rules to follow

The formal term for what is commonly referred to as a gîte is a meublé de tourisme, referring to furnished property let for short holiday periods. There are a few rules specific to letting all or part of one’s own main home, but this is not the focus here, as a gîte is usually property specifically used to let out. A holiday rental can last from one day to a maximum of 90 days for the same client. It must be for the sole use of the person who is renting, and must be for their holiday.

How to run a gîte: two ways

There are two ways of running gîtes. One is registering a business on the registre du commerces et des sociétés and paying business social charges (which gives French pension rights). This is usually when letting out properties is your main income and occupation. The other is to treat the income as personal investment income (social charges levied on investments are still due).

If you earn more than €23,000 from holiday rentals and this is your main income, you are regarded as a professional letter of furnished accom­modation (loueur en meublé professionnel) and must register as a business. If not, you are deemed non-professional and are not obliged to pay business social charges. You declare the income on your personal income tax return in section 2042C-PRO as revenus des locations meublées non-professionnelles.

However, tax officials say anyone doing regular furnished letting (even non-professional) should declare this to the commercial court on form Cerfa 11921*05 to obtain a Siret business number which you should write on the 2042C-PRO (tinyurl.com/ybq38gel).

Most people letting accommodation declare it as micro-BIC income, allowing for set income tax expenses deductions (it is also possible to declare under the réel system, proving real expenses, if it is favourable to you). In this case, if setting up as a business, you can choose the simple micro-entrepreneur set-up with fixed rates of business social charges on turnover. Micro-BIC expenses deductions are 50%, or 71% for ‘classified’ holiday lets.

Read more: new loan announced for Covid-stricken tourism businesses in France

Running a gîte if you're not a French resident

If you are not a French resident, French gîte income must be declared to your home country as well as France but in most cases (eg. the UK) you obtain a tax credit for French tax paid. Holiday letting may attract the CFE business tax, whether you are deemed professional or not, though there are various exemptions, including if the income from the activity is low.

Whether you are professional or non-professional, you must declare details of yourself and the property to your mairie on form Cerfa n° 14004*04 (tinyurl.com/ycabvjrz). In some cities you need a registration number which must be declared in advertising or if using sites such as Airbnb. A few, including Paris, Bor­deaux and Tou­­louse, also ask that you apply for autho­risation for change of use of the property. Ask your mairie about its requirements.

Most will ask you to collect a taxe de séjour, a tourist tax paid per night by each tourist. Com­munes decide on the amount. Your property must have a smoke detector and you must check with your insurance company that your house insurance covers holiday rentals. You can optionally have your property classified by an accredited organisation under a national French scheme for an award of one to five stars, valid for five years. You can find out more at: tinyurl.com/y8yu29we.

Got questions on income tax in France? Buy our specialised helpguide, here

You may also wish to sign up with a well-known holiday let labelling body, such as Gîtes de France or Clévacances. Gîtes de France is the best-known and was created in 1955 to help town dwellers find places to stay in the countryside. It arranges an inspection and rates the property with ears of corn, from one to five. Clévacances awards keys from one, indicating basic facilities, to five, indicating exceptional facilities and environment.

Both offer members legal, mar­keting and tax help and Gîtes de France recently revamped its logo, website and marketing options (such as online videos) to stay competitive. Con­tact a local branch to find out more. It costs a one-off €160 to sign up with Clévacances, then an annual payment of about €230, with regional variation. Gîtes de France has an annual payment, but the amount varies, taking various factors into account. Holiday rental owners must be flexible, as the market is changeable. This year, targeting the French market may be wise as travel for overseas tourists remains limited.

More reader questions, answered: we own a second home in France. How can we become residents? 

Our main image was drawn for Connexion by artist Perry Taylor. For more of his work see www.perrytaylor.fr.

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