Seasonal rental in France

Do not forget to declare your revenues for 2019 in May 2020 with the French tax authorities.

Many foreigners who rent out their holiday home in France do not know that this revenue must also be declared every year to the French tax authorities.

As from 2019, platforms such as AirB&B, Booking, Homeaway, etc. are obligated to declare the revenue and the identities of the owners to the French tax authorities. This declaration must be done at the tax office for “non-residents”. This must be done by a paper declaration in the first year and can be done digitally in the years to come.

To register your activity, the “location meublée” must first be registered at the localcity hall and then be registered at the local Chamber of Commerce. As soon as you are registered, you will receive a SIRET number and you must indicate which tax regime you choose.

There are 3 different tax regimes for furnished seasonal rentals.

The “micro” regime whereby you are taxable on 50% of the rental revenue (maximum turnover of € 70,000).

The “micro meublé de tourisme” regime, for which your holiday home must be classified by “Atout France”. In this scheme you are taxable on 29% of the rental income (maximum turnover € 170,000).

The “réel” regime in which you can deduct your actual costs from the income (turnover above € 70,000, or € 170,000, or when preferred). For this, you must keep accounts and submit an annual tax return. This regime is also mandatory for seasonal rental homes with multiple owners (regardless of the amount of sales).

As from 2019, the following tax applies to homeowners who do not live in France:

• up to € 27,915 you pay 20% tax + 7,5% solidarity tax on the net rental income,
• above € 27,915 you pay 30% + 7.5% solidarity tax

 

For example: in 2019 your holiday home in France was rented for € 6,000:

• The regime “reel” is not favourable because there is too little income
• In the “micro” regime you pay € 6,000 * 50% * 27.5% = € 825
• In the “micro meublé de tourisme” regime you pay € 6,000 * 29% * 27.5% = € 488

 

If the tax assessment according to the above calculations is lower than € 305 per year, it will be remitted. However, with a gross rental income higher than € 760 per year, tax returns must already be filed. For many homeowners with low rental income, this leads to an obligation to make a declaration, but not to the actual payment of taxes.

If you do not declare the income, you risk a fine of 10% to 80% of the amount to be paid, plus a fine of € 37,500 (or more) if the tax authorities can prove a tax evasion.

What can Axintera do for you?

To avoid any surprises, Axintera can take care of all registrations and tax returns for you. We offer you a free and non-binding calculation to help you choose the most favourable tax regime.

Interested? Send an email to contact@axintera.onmicrosoft.comwith the following information:

• municipality in which the holiday home is located
• total annual rental income
• number of weeks that you rent out your house
• current value or purchase value of the property
• current value of the furniture
• annual amounts of the taxefoncière and the taxe habitation
• annual amount of electricity, gas, water, other energy
• annual amount of insurance
• annual amount concierge and cleaning
• annual amount maintenance / reparations of the house
• marketing costs
• telephone and internet
• annual amount of interest in the case of a mortgage loan

Without the detail of all this data, we cannot provide a proper calculation.