- If you are letting out property, it is compulsory to notify this at the Mairie (form here below)
- It is obligatory to pay taxes over your letting income.
- In the European Union taxes must be paid in the country where the property is situated.
- It is your legal duty to declare your income.
The following situation is based on people who declare their 'normal' income in the UK and let out their property in France as a holiday home. In all other cases we strongly advise your to get in touch with an accountant.
The French regulations
Letting out your gite can be declared as extra income*** under the Regime Micro Bic.
If your turnover does not exceed € 760 per year, you do not have to declare it.
All house owners are already registered at the French tax office. You already get your bill for the Taxe d’Habitation and the Taxe Foncière.
However, the French tax office doesn't know if you have income in France that needs to be declared in France. If this is the case, you have got the legal duty to declare this income. If you don't, you break the law and may be fined. So, even if you pay taxes in the UK, there is one source of income that needs to be declared in France and over which you pay taxes in France: it is the income that you earned by letting out your French property.
Suppose, your turnover is € 10.000 per year by letting out your gite.
This turnover needs to be declared. The first time you do this, you will have to go to the tax office. This is the same office that sends you your bills for the Taxe d’Habitation en Taxe Foncières. At this office you will receive a form.
Because you already pay taxes in the UK and you only have income in France out of letting out your gite, you only pay taxes and no social security. On the form you will have to fill in your personal details like name, address etc.
Your turnover needs to be filled in in the supplement of the form under 'Régime micro entreprise'.
There are two possibilities:
- Locations meublées (5ND)
- Locations de gîtes ruraux, chambres d’hôtes et meublés de tourisme (5NG)
With a turnover of € 10.000 this comes down to:
5ND = € 10.000 - 50% abattement (tax reduction) = € 5.000 x 20% = € 1000,00 = 10% of your turnover
5NG = € 10.000 - 71% abattement (tax reduction) = € 2.900 x 20% = € 580,00 = 5,8% of your turnover
It is clear that 5NG is much more attractive than 5ND, to be precise € 420,00 more attractive. So what is the difference?
The difference between the two places on the tax form is whether or not your accommodation is calssified by an official organisation of the department where your gite or chambre d'hote is situated. If your accommodation has an official classification, you can fill in your revenues in 5NG - this is a much more attractive option. For information about classification of your gite or chambre d' hotes you need to contact the Prefecture of your department.
- In the case where your house is not officially classified, you must fill in your revenues in 5ND, and they may not be higher than € 32.600.
- In the case where your house is officially classified, you must fill in your renevues in 5NG, and they may not exceed € 81.500.
If your revenues are higher than mentioned above, you will have to notify the Chambre de Commerce and you will have to choose an official business form with another taxe regime. In that case you should contact a (French) accountant (expert comptable).