I have had an ‘avis de 1er acompte 2018’ through the post recently, reminding me that our income tax declaration is likely to be somewhat complicated this year and I had better start simulating it…
Would appreciate some help, advice, comments or constructive criticism of my approach to all this. I’ll be as brief and clear about the context as possible but please bear with me because it is complicated, so here is the background:
We have rented out a small furnished duplex via Tourist Office, Airbnb, Booking.com, leaflet advertising, any other method we can since 2014. The duplex is an annex to our main residence which already had its own front door and we completed the separation by a dividing wall
We set up an Autoentrepreneur status and duly paid quarterly cotisations, as we understood that my husband needed to do this in order to have a ‘status’ as an independent worker and therefore Carte Vitale etc. I am the main breadwinner, a salaried employee of a company and therefore with the CPAM.
Talking to a retired English friend who rents out an apartment, it seemed that autoentrepreneur status was not required and rental income could simply be declared on the household income tax declaration and tax duly paid (no cotisations to RSI required). Hubby would be covered under my health regime (CPAM and mutuelle) as a house-husband (exactly as the equivalent housewife would be). We were frustrated by paying thousands of euros in cotisations but realising that he would be entitled to no benefits such as sickness cover or retirement provisions because he was not earning and therefore declaring enough. I spoke to the regional tax helpline early last year and they agreed with this logic. Confirmed by a lawyer also.
We therefore went ahead and closed down the Autoentrepreneur regime as of 31st May 2017. With the intention of declaring the income under that regime for 5 months and then simply as ‘location meublé’ income for the rest of the year.
We spent most of the year buying a house that was the only remaining part of a multi-building site that we bought in 2014 and on which sits our main residence, the existing rental apartment and other buildings. We put this house into full-time rental operation under the same conditions as the apartment from November 2017 (much Booking.com, some Airbnb and some direct bookings).
However, in projecting our 2018 revenues and the tax and social charges that will be automatically applied by declaring on the impôts revenues, it looks as if we may be better off by re-starting a company after all.
So, the question becomes ‘regime simplifié’ or ‘régime réel’… people always seem to say stick to the simplifié if you can, to avoid the complexity and costs of full accounting procedures. But this article is quite clear that the regime réel would, in almost all circumstances, be more advantageous:
It certainly looks as if deducting all our mortgage interest and equipment / works amortisations plus any expenses (we have very little of those) would effectively wipe out our tax and social charges liability.
But, only worth it if paying an accountant costs less than our tax bill would be… I have seen from other posts that some people are paying circa 2 000€ pa for accounting services.
Has anyone switched to ‘régime réel’ for this reason? How was the experience? Benefits and pitfalls to avoid, please?
Also, anyone a member of a Centre de Gestion Agrée? Any advice on how to choose one and whether it offers the benefits alluded to in the article i.e. help with accounting and can offset cost of this as an expense in itself?
Thanks in advance!