I’ve just seen this article and thought that it may be of great interest to many of us on here. No idea of how true it is…
http://www.dailymail.co.uk/news/article-2523474/Brits-holiday-homes-Spain-France-banned-renting-tourists.html
You can choose not to be classified, but you have to pay more tax.
Personally we do not want to become an autopreneur because I would have to change from The CPAM to the RSI and I did not come to France to have so much stress that it would shorten my life. I have had enough with the CPAM thank you.
Hi,
We did try to register our gite, but the Mairie said we had to be classified first. I looked up the law, which had no mention of classification. Gite de France is a private, for profit, organisation, like any other holiday rental organisation, so why should it have a monopoly on classification. Surely, this should be done by your local commune, or department
Hi, Its not just Brits (typical Daily Mail headline), but all second homes in towns of more than 200,000, French -owned included. The idea is to encourage people to rent out long term rather than short (less than 3 months) term. On the positive side, they are also debating a measure to compensate renters for unpaid rent. It would be better if they just got rid of the 'no chuck out' between October and March.
French tax law makes a distinction between those who are ‘professional’ landlords of furnished accommodation, and those who are ‘non-professional’ landlords of such accommodation. The capital gains tax exemption on the sale of the rented property is now restricted to professional furnished rental activities with a turnover below €90,000 (instead of €250,000 formerly). This change does not affect lettings carried out as one of the following: gîtes ruraux, meublés de tourisme, or chambres d’hôtes classed as part of the para-hôtellerie sector. These should continue to benefit from the higher €250,000 turnover limit for capital gains tax exemption.
The distinction has nothing to do with their differing levels of competence(!), but with the level of their revenues.
At the present time, any landlord of furnished accommodation who receives more than €23,000 per year in rental income, or whose rental income amounts to more than 50% of their other revenues, are deemed to be ‘professional’ landlords and required to register with the registre du commerce et des sociétés.
Like HMRC tour Wimbledon every year looking for marquees etc in gardens during the tennis. Companies rent private houses.
Your comments are very true and can be useful for those planning on buying a gite or B&B or those planning on selling in the near future, I say near as leglislation can change of course.
We saw our accountant in November, part of a huge group which is on top of what's going on and what may be coming and he has advised us to seek legal advice on how to prepare for the exit as he calls selling, which we aren't planning on at the moment but ultimately will be and before the 22yr CGT limit. We are residents and live on site so working out the area and ratio of the property used for the hospitality trade has to be carefully measured,( which we had to do for the CFE as well) and he did say we could down size a year before putting on the market but all that has to be done with legal advice to avoid being hit by a backlash fine. I find my accountant's bills high but working with the accountant, notaire and lawyer is unavoidable now, which we didn't have to do with our business we ran for 15yrs in the North of France, then it was just an annual declaration on our income tax form and a slightly more complicated sale when we sold as we had to list all the furniture etc but we sold when CGT was still 15yrs and had owned for longer so weren't hit by that.
Sadly, I think this time it may be true. Our accountant has confirmed that it is obligatory to declare rental income on holiday lets in France to the French non residents unit for tax purposes. There was also an article in le Figaro regarding this and it seems that if any of you do your research it seems to apply to all EU countries. Greece now require you to have a licence which apparently costs anything from €2k to €5k for a 5 year period and Italy ask you to even declare to your local equivalent of the Mayors office if family come to your holiday home. I also came across this (see below)which is what prompted me to talk to our accountant. It clearly spells it out in the key points and preliminary obligations. There was also an article in the FT about tax on French holiday home rental income tax in 2012. If you live here and rent our your property in the UK then the rental income should be declared in the UK and tax paid there, so it is not different. The problem is that too many people bury their heads in the sand and do not do their research. It is their obligation to present themselves to the tax authorities. France is getting wiser to tax evasion by foreigners and has watched as other EU countries prosecute and enforce the law and as France need to reduce it's deficit it is only a matter of time before they close the net targeting the larger tourist areas first.
http://www.afaexpertise.com/assets/afa-expertise-fact-sheet-owning-...
http://www.ft.com/intl/cms/s/0/e3e3499c-c76b-11e1-8653-00144feab49a...
By the way, good point about the CGT. But people should also remember that a lot of people's main income who run these types of businesses for a few weeks of the year to supplement their main income (ie pensions) so it is important to put the whole thing it to prospective and it also depends on whether you are classed as professional or non professional letting. This is something that we discussed with our notaire in some depth when we went to see him about setting up the business and setting up our déclaration d'insaisissabilité.
Very possible.
But take note of what Hilary has just told us.
Hear, hear!
Can I throw another factor into the equation for legitimate, resident gîte and Chambres d'hôte owners. I recently translated at the notaire's office for a couple who are selling their B&B. Madame is registered as AE for chambres d'hôtes and it is the main source of income for the household. The notaire told them that the "chambres" would be considered as a business and therefore not part of their maison principale for the purposes of calculating impôt sur la plus value (capital gains tax). I have already seen vendors being stung for CGT on the value of the gîte attached to their main residence, but not on rooms used for B&B.
I was told by the notaire, that if it had been a secondary activity - for example a farm doing a little declared B&B - the rules would not have been applied in the same way.
In this case, the sale price, once all the calculations had been made, worked out less than the purchase price, so there was no capital gain. But it is something B&B/gîte owners should be aware of when selling. It may even be worthwhile ceasing the business if you are intending to sell, so as to avoid paying CGT. But that is a big gamble to take.
Unlikely to be true if it's in the Daily Mail
Britain just wants to enjoy the bar, perhaps?
This law came into being in Spain this year and applies to your permanent home or attached appartment, even if you rent it out for a couple of weeks whilst you are visiting somewhere else. You can no longer rent out any property unless it is held in a Ltd company and you disclose everything for tax purposes anyway. Or, you can rent it out through an agency and of course they will enjoy most of your profits.
The Spanish government say they legislated on this because the vast majority of people renting out property here were not disclosing it or paying any tax. The situation used to be, declare your earnings, deduct all reasonable costs and pay 25% tax on the balance. Seems attractive now to those who always cheated the system.
Too many people were greedy and declared nothing so everyone is now paying the price which includes heavy fines.
Thr Mail as usual is behind the 'Times'.
So what has actually changed? Gites have had to be registered with the mairie for a while now, that opens up the door to collecting taxes which are not that high for summer renters and it looks as if inspections will happen and the french will have more to fear from that than most Brits. Just the usual garbage scaremongering from the press and as usual the DM.
Still fires up the forum's though
The problem is that Britain allies itself with the States and not with Europe. The British people will never be European now. One man said to me - "Your problem is, you are an Eurocrat!" Well yes.
A lot of brainless filth is spewed out by the British press against "Europe". It's sickening. You will be interested to learn that it was not so long ago (some months back, I think) that Newnham Council (in East London -- the area which has had an avalanche of Olympics guests/tourists) started fining so-called landlords who were not registered with the Council. In fact, it's no secret (=BBC had had a programme or two on this topic of beds in sheds) that many of these so-called landlords had/have unplanned, unauthorised, illegal beds in sheds -- and no regard is paid to health and safety nor to the dignity of the people/families living in these appalling dwellings. They pay good rents but the living conditions are awful, unsafe, insanitary, and are potential fire hazards. But of course, anything sensible from "Europe" is suspect, state interference, backward, without merit...., of course, of course???
Hear, hear :-)
Val, that's so true. This is about the first time I've seen people rallying to those who agree that we should comply to local leglislation. Here in the Luberon there are hundreds of B&B's, some on the black I'm sure, but the majority are legal as you need to be to get the business coming in. We compete with the hoteliers on fair ground.
Being the Daily Mail, as usual they have mixed up various points but a couple which caught my eye were "Owners will have to pass regular safety inspections and obtain hygiene certificates. Failure to comply will lead to hefty fines." - can anyone really complain about that, safety and wellbeing of guests. UK tour operators are obliged by law to do H&S inspections annually, meaning that a property or hotel has been checked and deemed to be of a sufficient standard each season. If you book through a Tour Operator as a client you have more comeback if something is wrong than someone renting out a house that has never had these checks. I can see the allure of booking direct, would do it myself, but with experience of working for a TO selecting properties, despite there being a good number of quality rentals out there, there are also others you would be worried to stay in.
As for another statement "In France, the new law will clamp down on homeowners in the three cities who let their second property to tourists." - The new law aims to clamp down on holiday rentals in cities that are undeclared to the local tax authorities, and above all remain unchecked, it is a gripe these authorities have where housing is scarce, income from such rentals is rarely declared and currently they are only looking at city properties.
I think most of the article is just Daily Mail scaremongering, if you are legit, surely no reason to worry.