Gîte owners in west France hit by surprise tax bills

Tax is being levied unless owners can prove their properties were not available for personal use on any day of the year. One owner couple in Brittany say they now face closure as a result

Many gîte owners are being charged taxe d’habitation on properties as they cannot prove they were not available for personal use on any day of the year
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Many gîte owners are being charged taxe d’habitation on properties as they cannot prove they were not available for personal use on any day of the year.

One couple is facing a bill of over €10,000 and say they will be forced to close if no solution is found. Our research shows that the issue is widespread in Brittany, especially in the Finistère area.

The couple, in their 50s, who have built up a business with several gîtes, report that after years paying only CFE business tax and taxe foncière, they have received a tax office letter saying they will be billed for taxe d’habitation, backdated to 2021.

The letter, shown to The Connexion, said they had the properties “at their disposition” on January 1, 2021, the test for eligibility, and even properties used for furnished holiday letting can be taxed if there is no proof pre-dating January 1, 2021 that owners were “totally deprived of personal use”.

They were told to expect a bill but could “make observations”, said one of the couple, who asked not to be named. She said she knew of other gîte owners who had also been billed but whose objec­tions were not accepted as they could not prove their homes were available to let 365 days a year.

Properties used partly for holiday letting may be subject to taxe d’habitation if some personal use is reserved, but the couple said this strict attitude is new to them.

Payment of business tax – they also have a registered letting business and pay business social cotisations – had previously been accepted as evidence that they did not use them personally. Mairies may, optionally, vote to exempt all properties used as chambres d’hôtes and furnished tourist lets from this tax, but only in designated ‘rural revitalisation’ (ZRR) zones, plus in theory only furnished tourist lets classified under the star-rating system benefit.

‘Classified’ lets of a person’s main or second home might also be exempt from CFE if mairies do not vote to the contrary.

“We live opposite the gîtes so there would be no reason to use them,” the owner said.

She said the new tax would be over €10,000 for 2021-22. “We would have to close if we have to pay this. We don’t make huge profits,” she said.

The properties are not in a ZRR and are unlikely to benefit from CFE exemption but even if they did the couple would still be thousands out of pocket as it amounts to much less than taxe d’habitation.

Their accountant believes tax offices to be exploiting the ‘loophole’ to raise more tax. “It seems we’re not even allowed to shut for one day a year. It doesn’t matter if you are going on holiday or want to renovate. We invest heavily in our gîtes and not many people want a holiday in Finistère in winter.”

She had heard claims that this is a trial in the department before a possible roll-out.

The owner said they face competition from people letting via platforms such as Airbnb, who she said often do not have the same overheads. Often Airbnb users let out part or all of their main home, and in some cases do not pay CFE or cotisations.

Taxe d’habitation is no longer levied on most main homes and will be abolished for all from next year; it remains for second homes. In certain areas with housing pressures, mairies can opt to increase their part of the tax on these by five to 60% (a part may also go to an intercommunal body).

Read more:French taxe d’habitation: Who is fully exempt in 2022?

The owner said they might look to see if they can change their business footing so the properties come under a different category, such as résidences de tourisme.

From inquiries among other gîte owners in the department, a significant number have received letters relating to taxe d’habitation starting from 2021’s tax. In a few cases tax offices accepted ‘observations’ and dropped the levy but in many others they did not. Some have gone to court but without confirmation of a successful challenge so far.

Reportedly, proof that the gîte was let out on January 1 of the relevant year might help.

We have asked the central tax authorities if they wish to comment on claims that this is an intentional policy being tested in Finistère.

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