How do we declare letting income on our French second home?

Reader Question: We are British residents but have a (furnished) second-home in France and have let it out on Airbnb a few times. The income from this has not exceeded €2,500 in a year. I assume we need to declare these earnings. What should we do this?

If you let furnished accommodation – such as, for example, an Airbnb flat – your activity is classed as ‘commercial’ though in most cases you do not have to actually register a business.

So-called ‘professional’ landlords are required to register their activities as a business, but non-professional landlords are not.

As a non-resident, you would only be classed as a professional landlord if your annual letting income exceeded €23,000 and also constituted more than 50% of your taxable French income.

The €2,500 that you earn each year from your Airbnb does not cross this threshold and so you will not be deemed to fall under this.

If your letting income is under €70,000 before tax – which yours is – the most common option would be to declare under the micro-Bic regime, which is not a business structure but a specific tax status which benefits from simple tax rules.

This brings with it a 50% tax allowance (which will be at least €305) for normal furnished lettings.

For furnished tourist accommodation that is classified in the French star system the tax allowance rises to 71% (this requires a specific application and inspection, which may or may not be worth considering).

Most non-residents are then taxed at 20% tax + 17.2% (or 7.5% for EU/EEA/Swiss and UK residents) social charges. There is a higher 30% tax rate for French taxable income above €26,070.

An option also exists to ask for your worldwide income to be taken into account to see if your average French tax rate would have been lower than 20% (or 30%) in this case.

In your case, if you are taxed at 50% of €2,500 at the 27.5%, you can expect a tax bill of €344.

How to declare your income as a non-resident

When declaring for the first time, you can do so on paper using forms that you can find in the search box at impots.gouv.fr

Alternatively you can declare online if you have a personal space on the site.

To do this, go to impots.gouv.fr and click on Votre espace particulier, which will lead you to Connexion ou création de votre espace.

You will be asked for your numéro fiscal (tax number), numéro d’accès en ligne (access code) and revenu fiscal de référence (the figure roughly corresponding to your net taxable income).

If you do not have access to this information, you can click on the Aide help button and obtain a numéro fiscal by choosing Vous n’avez pas encore de numéro fiscal? (You do not already have a tax number) and then Centre des finances publiques.

You will be asked to enter your French address, and will then receive a letter asking you to create your personal account.

Once this account has been created you will be able to declare your income online in April or May each year. If you were ever required to pay tax in France it would only apply to your French income as you are not a full-time resident.

Micro-bic income from lettings is declared in box 5ND.

Note that as this is a kind of income that you have coming in regularly, the French tax office is likely to put in place monthly or three-monthly instalments of estimated tax from your bank account, based on the last declaration, as it is not able to directly tax your income at source.

Any tax taken in this way is later checked against the annual declaration to make sure that you have paid the right amount, neither too much nor too little.

You can find out more about tax at source and declaring your income on the impots.gouv.fr website. The Connexion will also be publishing our annual help guide to French income tax later this month.

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