Ok, I now understand re UK rental pushing up your revenue fiscal de reference - that wasn’t clear so why I raised the point.
We now have S1s (first year of having them) and accountant has told us that the way we run the rentals will not cause the S1 cover to be removed so we are looking forward to not paying social charges for the first time! Let’s see what happens when we submit our return…
Yes but it’s not the RFR that matters but the type of income it’s made up from. CMU used to charge a percentage of all global income but PUMa only charges a percentage of global capital income, which includes rental income. With the S1 and just doing personal tax returns I don’t pay charges in France on my UK rental income but if I start an AE/ME, my healthcare would be via that so I’d lose the S1 (France would be my competent state if I started an activity) and I would start paying PUMa cotisations on the UK rental income if I didn’t reach the right threshold with the French rental income.
'We now have S1s (first year of having them) and accountant has told us that the way we run the rentals will not cause the S1 cover to be removed so we are looking forward to not paying social charges for the first time! ’
Does that mean if you just declare it on your personal return you’re not liable for social charges on the French rental income? I can’t remember whether social charges are due on that anyway, regardless of the S1, because of it being situated in France? If the S1 means no social charges even on French rental income, that’s yet another reason for me to be reallly careful about starting an activity.
Actually I don’t think an S1 would mean not being liable to social charges on rental income anymore, even if it used to, because a change to the way they allocate the funds means they can charge them to non residents on capital gains now, so wouldn’t rental income, still being capital income, be treated the same way?
I was refunded the social charges on the capital gain on a property I sold (not principal home) in 2015 but if the sale had gone through the following year, I wouldn’t have been able to claim a refund, regardless of not being ‘a la charge de France’ for healthcare. I don’t think this change affects pension income but I think it will affect rental income (if it was ever exempt from these charges at all).
Now my head’s hurting! Up 'till now we have paid social charges via CMU/PUMA as inactifs. (we don’t have AE/ME status) so can’t tell you for sure what the effect of having the S1’s will be, and don’t want to set you wrong. I haven’t re-read the various documents to double check…
Those aren’t social charges - they were healthcare cotisations (8% of capital income over the higher threshold with PUMa but they were charged on all income via the CMU). Social charges are the csg, crds etc (used to be 15.5% but are now 17.2%) that are charged on investment income, capital gains and income and on early retirement pension income if you don’t have a S1. So once you get your S1 you shouldn’t pay these on any pension income but will still have to pay them on rental income, capital gains and income and investment income. PUMa cotisations are charged by URSAFF but social charges are charged by the tax office and are shown on your avis d’impots.
Yes I know…was just using "social charges " as short hand.
All this started me off on a reading spree (again) of all the ins and outs of short and long term renting, (furnished/unfurnished), tax implications, legal implications - and as usual by the end of it I’ve gone round in circles and have no clue what I’m going to do 
I guess I’d just better get on with getting the places ready for - something…
Soooo, paid circa 100€ for a consultation with a local expert comptable who ‘guestimated’ from the info we had prepared that, in fact, we’d be better off on regime réel this year but it is obligatory for 2 year periods and would not be the best option for our projected revenues and costs next year.
I went home, refined my numbers, thought it was a bit close even so and sought a 2nd opinion from the accounting service behind the website that I found the original article on (Compta.com). An expert on renting gites as Loueur Meublé Non-Professionnel spent over half an hour on the phone with me, guiding me through their thorough (and free) online simulator - which confirmed the expert comptable’s opinion. I will save about 1,000€ pa by being on Micro BIC simplifié vs. régime réel over a 25 year period. Got a full report via email whilst still on the phone to the chap - and all for free!! Can’t fault the service. Basically, we are unusual in the regime simplifié being more advantageous than the regime réel because we bought the property at a very good price and have a very high occupation rate (therefore income ratio is higher than usual too…).
Further optimisation potential was discussed by getting a ‘classement’ which I am looking into now and will give rise to 71% abattement instead of the 50% I will benefit from currently.
No ‘company structure’ required although the tax office required a bit of persuading as to reactivating my SIRET number although we are giving up Autoentrepreneur status. I eventually got steered to a P0 form which I have duly sent off with explanation of how we intend to declare our income on household income tax form.
Debra - short term renting profitability depends on where you are and demand in that area. Personally, we calculated that we would make 4x more on short term than long term furnished rentals (due to a ‘black hole’ in supply in our particular location). And everyone we know who has done ‘traditional’ rentals to French tenants have unfortunately fallen foul of the law preventing evictions in winter, leading to unpaid rent, long periods to get tenants out and often having a trashed property returned to them - very costly all round! Compared to the ‘guarantees’ offered by letting through platforms such as Airbnb, Booking.com etc. it seems like a no-brainer to short-term let.
Hope all this has been of some use!
Just for info Jane, the expert comptable that we consulted said that you are NEVER obliged to have your accounts done by an expert - but it is recommended if you are not confident in filling out the forms yourself. A Centre de Gestion Agrée seems to be very good value compared to traditional accountants (the one we consulted said “go to them, they’ll do the same as I can but cheaper”!). The list of costs that could be offset for regime réel actually seemed quite extensive…
Now that’s interesting thanks! I may well ask a few more questions of our own expert comptable… I think you are right and the key is to work through the best option for one’s own specific circumstances as seemingly small differences can make one option so much better than another.
We are LMNP with a gîte and a long term rental. Fingers crossed, but our long term rental (meublée) has not been a problem and does actually give us better income for less work than the gîte. (I hope I’m not tempting fate here).