Login:           Forgot login? | Register
GiteDoctorGlobalHeader940

FAQ - Accounting Support

How do I declare rental income from my gite?

The first step is to declare your business activity to the French tax authorities, who will then register you with the relevant tax office.  You will need to prepare an annual declaration of income.  If you are resident in France, your declaration needs to be submitted to your local tax office, but if you live outside of France it will be to the centre for non residents in Noisy.

The amount of tax you will pay on your income will depend on two main factors –
1. How your profits are calculated, which itself depends on the type of business registration you have - for example, 
the "micro régime" (which is based on a fixed deduction for expenses -  in most cases this equates to 50% of turnover), or "réel" (turnover, less the actual business expenses). You can opt for either type of registration, but to make sure you opt for the right choice it is wise to consult an accountant before you make your first declaration.
2. Whether you are a French or UK resident for tax purposes. If you are French resident, the gite income will be added to any other income that you have, and you will be taxed after deduction of your personal allowances.  If you are non resident, you will pay 20% tax on your profits to the French tax man, but you also need to declare the income in your home country.

 

Do I need to pay National Insurance contributions on my gite income?

If you are not resident in France (ie not registered as a resident), then in most cases, the answer is no. If you are a French resident however, then it depends on whether your gite is your main source of income, or whether it is considered a professional business (ie, your only source of income, or if the total turnover is more than 23,000 € per year).  Social Security contributions (usually to an organisation called "RSI") will then be payable, and will amount to around 43% of your net profit.  You will of course then be entitled to healthcare and pension rights in France as a self employed person.

Do I pay "taxe d’habitation" on a gite?

If the property isn’t your main home, and if it has been specially adapted for rentals, then generally speaking, the answer is no. If you have separate “logements” however, (ie your main house is split up into your home plus separate rental units), then the tax office will split the “gite” element from the "home" element. You will then pay "taxe d’habitation" on your main home, and "taxe foncières pour les entreprises" on the gite element. 

Do I have to register for TVA (VAT)?

No, because most gite businesses are exonerated from TVA – but you can elect to register if you wish.  If you do so, you will normally pay a reduced rate of 7% instead of the standard 19.6%.  This may be advantageous if you have lots of building and other works to carry out to get your gite or gites up to a sufficiently high level to rent out, because you can then claim back the TVA on those expenses. You do have to register for TVA if you provide other services which may result in you being considered more like a hotel.

Will I have to pay capital gains tax when I sell my gite?

It will depend on whether you have been a "professiona"l or "non professional" gite business. If you fulfil certain conditions, such as being registered with the chambre de commerce and earning at least €23000  a year, then you may be exonerated from capital gains tax. If you are not considered professional, then you will be in the non professional régime.  This means that your gite will be considered as a second home rather than a business, with full exoneration from capital gains, but only after 30 years of ownership.

What accounts do I need to keep?

If you register under the "micro" regime, then it is only your income that needs to be recorded, without the need for recording expenses.  You may be asked to prove the accuracy of the figure that you declare on your income tax return, so keeping proper records is essential. It is still a good discipline to keep a full record of both your income and expenditure though, so that you can calculate whether the business is being run profitably or not. 

For a "réel" business, you will need to keep proper books and records that will allow an annual balance sheet and profit and loss account to be drawn up.  You will also need a separate business bank account. (see our fact sheet on this subject)

Is buying a gite a good investment?

The rates of return that you might expect from a gite that costs, say, 150,000 €, will depend on things like where it is located, what advertising you carry out, and the level of "luxury" you envisage.  On average, you should expect to achieve a minimum of 5% per annum by way of a return on your investment.  With prices generally low at the moment, a gite is likely to gain value over time, but should be seen as a long term investment - unfortunatley, nobody can predict how long the economic crisis will really last. If you intend to use the property yourself out of season, then now is a very good time to buy, as prices are generally low, and France is still one of the most popular holiday destinations, so you can enjoy it yourself AND achieve some income!

How many gites do I need to make a living?

It does to a certain extent depend upon how much you need to live on yourself, and whether you have other sources of income as a top-up to your gite rental income. (such as a pension for example). If your gite business was in a good coastal area, and had, say, three letting units, and you took the time to arrange very effective marketing then you could expect to achieve around 30,000 € a year. The net profit of course will depend on your personal circumstances and the level of tax payable.

Is it a good idea to set up a company to run a gite business?

This depends on lots of factors, including your personal circumstances, how you bought the property (if you want to transfer the property to the name of your company after originally buying it in your personal name, then you would have to pay stamp duty and Notaires fees to put it into the company books), how long you intend to trade, how many properties you have (economies of scale), and whether you are a French or UK resident for tax purposes.  it’s a good idea to discuss the options with a French accountant in order to structure the purchase efficiently.  If you have already bought the property personally, then you could decide to lease it to your own company if that makes economic sense.

Where do I pay my tax?

Whether you are a French or UK resident,  you will pay your tax in France initially. if you are a UK resident, you also have to make a declaration for foreign property earnings, but will get double tax relief when you make your UK self assessment declaration.

end faq

Answers to your Questions

If you have a niggling problem or query then pain relief for it may well be found here.

In this section we deal with some common issues experienced by many gite owners.

You can pick a category and then browse the FAQs within it. The solution you need may be only a few clicks away.

For less common questions you should consult our Factsheets in the Document Store, or contact one of our consultants directly.

 

Our plan is to make The Gite Doctor the primary information resource for property owners in France. If you have a question that is not answered here, or if you have suggestions for information we could add to these FAQs, then email us now.

 

  • Check Up
  • Hand Holding
  • Specialist Care
  • TLC
  • Intensive Care
  • Follow Up Care
Tel: + 33 (0)2 96 24 74 27.        Terms and Conditions   ::   Privacy Policy   ::   Disclaimer

The Gite Doctor uses cookies to provide a personalised service and improve our site. By using our site, you agree to our use of cookies. Learn more