Do you dream of moving to France, buying a house and having a cottage or property nearby that would be an ideal gîte? You could list it on one of the many rental sites available, sit back and wait for the bookings to come pouring in… Except – there’s a bit more to it than that, especially when it comes to keeping on the right side of the regulations that apply in France. We asked Tracy Leonetti of LBS in France to share her top tips to running a gîte in France – and staying legal.
Tip 1: Register your gîte with your local Mairie
The Maire has the right to refuse your gîte if the level of the tourism in the area can’t support another one, so it’s a great idea to check before you invest in a project that is not going to get off the ground. This is particularly important if you are relying on the income from your gîte to provide a significant percentage of your annual revenue.
Assuming the Mairie says yes, there’s also a declaration to be filled in. This has nothing to do with tax and is just an administrative document that asks for details of your gîte, including how many it can accommodate, what periods of the year it will be available and your contact details. It will also ask whether the gîte has been officially classified. (This is not obligatory but can have tax advantages if you set up as a business.)
Once you have the go-ahead from your Mairie, you’ll need to determine your tax responsibilities and officially register your gîte. There are two types of registration, professional and non-professional. The most important thing to know is that any rental income that your gîte generates is taxable here in France, whether or not you are a permanent resident.
Tip 2: Understand the difference between a professional or non-professional gîte owner
If the gîte is not your primary income source (maybe you work elsewhere, or have your own separate business) it counts as non-professional. To qualify for non-professional, annual gîte income must be less than 23,000 euros. You register as a ‘Loueur Meublé Non Professionnel’ and will need to provide a copy of your passport as well as proof of ownership such as the deeds to the property (called the ‘titre de propriété’) which the Notaire who handled the purchase of the property should give to you. No proof of French residency is required for non-professional registration. You must declare the annual revenue on your French income tax return via the impots.gouv.fr website.
However, if running the gîte is a full-time business for you, it is classified as your professional and principal activity. Normally this would imply an income of more than 26,000 euros. You will need to hold either a titre de séjour (residency permit), or business visa to be eligible to register with the Chambre de Commerce et de l’Industrie.
Tip 3: Find out about the taxes that apply to running a gîte
According to government regulations, your activity must be officially registered within two weeks of opening.
The simplest business option is to become a micro-entrepreneur or start an ‘entreprise individuelle au réel simplifié‘. Though these may be the easiest and cheapest ways to set up your gîte business, neither of those options entitle you to any tax relief on the money you have outlaid, such as building work, decoration, furnishings and advertising.
You will pay 22% social security charges to the French government on all rental income. You’ll also have other outgoings, for instance up to 20% service fee if you list your gîte with popular rental agencies. If you think your gîte is likely to become successful, it is worth looking into setting up the French equivalent of a limited company. This enables you to claim tax benefits on setting up, plus ongoing running costs.
If you start off by registering your gîte as a ‘meublé non professionnel’ and then find that business is booming and it’s bringing in more than 23,000 euros a year, you can easily change your status to ‘loueur meublé professionel’’ – get an accountant to assist you with this.
Tip 4: Make sure you apply for the right visa
The best way to do this is to consider the timeline ahead of you. Many people go through the pain and hassle of applying for a costly work visa and making a business plan, when in fact most people don’t actually have their gîte business up and running during the first year. Renovation takes time, moving in and sorting out your home and life in France also take time. A better option might be to apply for a simple one-year (long stay) visa instead. At the end of that year, you can apply for residency (titre de séjour) which automatically allows you to work – and you can do it all from within France.
Tip 5: Get the right help
LBS in France can help with every aspect of setting up your gîte, from applying for the right visa to choosing the right business structure and finding out if you are entitled to any government subsidy to help with renovations.
For expert advice, you can find out more or book a consultation at lbsinfrance.com
