Gite owners in France urged to take advice on tax changes

There is good and bad news for people offering gite and other furnished holiday accommodation.

On the plus side, it has been confirmed that recent harsh tax changes will not apply to 2023 income declared this spring.

However, the changes do – at least until further notice – apply to income received from January 1, 2024, to be declared next year.

Chambres d’hôtes and long-term furnished rentals are not affected.

Read more: Respite for gite owners in France as harsh tax change is put off

Changes to expense allowance and income ceiling

The changes concern use of the simplified micro-Bic accounting system and the expenses allowance available, and the income ceiling before owners must use the more complex réel accounting system.

The ‘old’ rules are, for properties not classified with a star-rating, a €77,700 ceiling and a 50% expenses allowance; and for classified properties, €188,700 and 71%.

The new rules state that the ceiling to benefit from the micro-Bic is reduced to €15,000 and the expenses allowance to 30% – or 51% for star-rated rentals in areas that are not deemed subject to housing pressure.

Further changes in the pipeline

Adding to the confusion, French MPs recently voted through a proposed law that could change the rules on furnished holiday rentals yet again, potentially applying to income starting from January 1 this year. It has yet to go to the Senate.

We suggest taking advice if you offer furnished rentals under the micro-Bic system and may go over the ‘new’ ceiling mentioned above.

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