Rental Income and Caretaking
A popular way to make extra income is to provide holiday accommodation in the way of gîtes or chambre d’hôtes, which can run from one or two rooms in a house to full-on tourist businesses. Firstly, decide whether rental income will be a top-up or if it’s going to be your professional activity, as that’ll affect the way you need to set up the business.
A gîte is a furnished let, usually offered on a weekly basis, and is independent of the owner’s home. The market is competitive and saturated in popular areas. If you’re buying a property thinking of offering gites, take into account the importance of easy access by ari, road and sea. Check the real start and end of the holiday season, to make sure that you’ll get back the costs of renovation, furnishings, running expenses, wear and tear, and maintenance.
The definition of a chambre d’hôtes is a furnished room in the home of the host, offered to guests for one or more nights, in return for a fee and other services. There’s a maximum number of five bedrooms and a capacity of 15 guests at any one time. Each bedroom must have access to a bathroom and WC, and all facilities must comply with standards of hygiene, cleanliness and security. The chambres d’hôtes must also be declared before the Mairie.
Rental income from a French property is always taxable in France, regardless of where the money is paid or where you live. It’s treated in two different ways: Revenus Fonciers, applicable to income from land and unfurnished lettings; and Bénéfices Industriels et Commerciaux (BIC), applied to income from furnished lettings, which is treated for calculation purposes as commercial income.
Gîtes and chambres d’hôtes fall under the ‘Micro-BIC’ tax regime and benefit from a fixed tax of 29% on their annual turnover, while landlords with other types of lets are taxed at 50% and have a much lower turnover threshold. Under Micro-BIC, no expenses, accounts or separate business tax forms need be prepared, but the main drawback is that it always requires a fixed taxable profit so you can never post a lower net profit or a loss. If rental income exceeds €33,000 per year, landlords ae taxed under RRS (Regime Réel Simplifié), which allows them to claim for letting expenses (maintenance, repairs, restoration, running costs, etc), but there’s a lot more paperwork involved.
Remember, the UK and France have different rules around taxable income, though there’s no ‘double taxation’ for UK residents. In addition, the UK ‘tax year’ runs from April 6 to April 5, while in France it’s the calendar year. As ever, be sure to take professional tax advice in all areas before making a decision!
Professional caretakers can make a huge difference to your peace of mind if you let out your property. A living can be earned by care-taking gîtes, although it can be very time-consuming, with a high concentration of seasonal work, then months of silence. It can also be very physical if you look after general cleaning and gardening chores. All income, however low, must be declared.