Taxation: what you need to know
Depending on your activity, we recommend that you contact a professional tax advisor (chartered accountant, tax consultant, tax agent, etc.) to examine and verify your personal situation and validate the information below.
As the tax rules vary according to the amount of turnover (i.e. the amount of rent received), here is a summary of the tax rules that apply to most property owners.
A private non-professional owner who receives annual income from seasonal lets (usually on a weekly basis) is subject to a number of tax obligations:
! If you are a non-professional furnished lettings business, you can consult your CFE notice in your tax area. This notice is no longer sent by post.
Yes, you are liable for this tax; business tax has been replaced by the territorial economic contribution (CET). This new contribution has been applicable since 2010. It is made up of two components: the contribution foncière des entreprises (CFE) and the contribution sur la valeur ajoutée des entreprises (CVAE).rental or subletting activities (with the exception of the rental of bare dwellings for residential use) are considered to be carried out on a professional basis. Article 1447 of the General Tax Code also states that this contribution applies to individuals, legal entities and unincorporated companies. You must therefore pay it within 30 days of it being levied (art. 1663, paragraph 1 of the General Tax Code).
1 • DECLARATION D'ACTIVITE +
Registration with the Registry of the Court :
12 Bd de la Colonne
73008 Chambéry Cedex
Formality free of charge for non-professional hirers.
This procedure is compulsory under article A 123-84 of the French Commercial Code, whether or not the property is listed.
Compulsory registration with INSEE :
Une location meublée doit faire l'objet d'un enregistrement auprès du répertoire national des entreprises et des établissements (SIRENE).
In fact :
• on the one hand, according to the official tax bulletin BOI-BIC-CHAMP-40-20, the habitual letting of furnished rooms or flats by any person is a commercial activity which, for income tax purposes, falls into the category of industrial and commercial profits (N.B.: the habitual nature of a letting does not depend on its duration but on its repetition over the years (Conseil d'Etat 28-12-2012 n° 347607: RJF 3/13 n° 257));
• on the other hand, according to article A123-84 of the French Commercial Code, "individuals or legal entities that may be registered immediately in the national register of companies and establishments are those covered by at least one of the following provisions: (...) individuals or legal entities whose income falls into the category of industrial and commercial profits".
You need to fill in a form:
• Poi (for the first registration of an individual or a couple married under a community law).
Files to download
• F (for joint ownership by individuals (brothers and sisters / married couple living separate and apart / civil union partners, etc.).
Files to download
• P2/P4 or F (for all other events).
Files to download
2 • INCOME TAX RETURNS+
On your tax return, you will have 2 choices:
A/ The "micro - BIC" scheme
The automatic scheme is the Micro Entreprise scheme for non-professional industrial and commercial profits. (annual income is less than €72,600 for ordinary furnished accommodation or €176,200 for classified furnished accommodation).
The owner will simply have to declare his gross income on lines 5ND (for unclassified furnished accommodation) or 5NG (for classified furnished accommodation) of the 2042 C PRO supplementary income tax return.
This gross income will be subject to an allowance of 50% or 71%. The 71% allowance is only available for furnished tourist accommodation, i.e. classified furnished accommodation. For just €72, the Maison des Propriétaires is authorised to carry out inspections for classification as a furnished tourist accommodation. Contact us for more information.
IMPORTANT : If your furnished accommodation is classified, remember to check on your tax return that you have completed box 5NG (and not 5ND); otherwise you will only benefit from the 50% allowance!
Once the allowance has been applied, the remaining profit will be added to your other income and taxed at the average rate for your tax bracket.
The landlord is obliged to keep a simple record of expenditure and income, which may be requested.
B/ The Simplified Real Estate Regime
It is possible to opt for another tax system, the Simplified Real Income System (Régime Réel Simplifié Bénéfices Industriels et Commerciaux non professionnels).
This option requires you to keep accounts, producing an income statement and a balance sheet (2031 return and 2033 schedules).
This option allows you to deduct actual costs, as well as interest on loans and depreciation (on the value of the property, work carried out, equipment, furniture, etc.). This option is recommended for renovation projects.
Given the value of the property in relation to the rents received, this often results in a deficit being generated, and therefore no tax being paid on this income.
This tax solution may seem cumbersome because of the administrative constraints involved, but it can represent a significant tax saving. We recommend that you seek the advice of a professional tax advisor.
3 • SOCIAL SECURITY CONTRIBUTIONS+
These profits, after allowance or deduction of actual expenses, are also subject to social security contributions (currently 17.2%).
4 • LOCAL TAXES+
• Property tax as the owner of the property
• Council tax is payable by people who own property in the Commune.
• The cotisation foncière des entreprises (CFE) is a local tax payable by owners of furnished accommodation, which is not linked to income.
Pursuant to article 1478 of the General Tax Code, the Cotisation foncière des Entreprises is assessed in accordance with the situation on 1st January of the tax year.
Classified furnished accommodation is exempt from CFE.
To have your property classified, contact us on maisondesproprietaires@lesarcs.com.
NOTE: the situation on 1 January of the tax year is decisive.
A classification issued after 1 January 2021 will take effect for the 2022 CFE.
A classification issued on 31.12.2020 will take effect for the 2021 CFE.
• Tax for household waste
• TV licence fee
• Visitor's tax: insofar as your tenants pay it to you, this is not a tax that you are responsible for, but you are obliged to collect it and pay it back. For this tax, which contributes to the economic development of the resort, you are simply the collector. It's a "win/win" principle to maintain the virtuous circle of quality tourism.
5 • SACEM RIGHTS +
