French Rental Taxation Guide

Rental permission & taxation In France

French Rental Income for Non-Residents

French rental activity rules and regulations for Swedish citizens

If you earn an income from renting out your property in France, you are obliged to declare that income in France, and pay any relevant taxes in France, in the first place (Mandatory). According to the declaration agreement between France and Sweden named 1991:673, you are also obliged to declare your income in your Swedish tax declaration. FR tax minus SE tax is the deductible tax you have to pay in Sweden.

Tax period

French tax year runs from January to December, and income tax returns are filed in May of the year following tax year. Same as in Sweden. 

Furnished apartments

Furnished apartment is when the property is let furnished, which goes under the category of self-catered furnished rental, and is classed as a commercial activity in France. It requires registration with the relevant authorities. For furnished rental, according to how the property is owned, and the level of gross income earned per annum, there are 2 tax regimes available for this type of rental activities, as follows:

  1. With the MICRO régime, you simply declare your gross rental income on your annual return, and the French tax authorities apply a fixed tax-free allowance of 50% for your costs. You are then taxed on the r remaining 50%. Non-residents start at 20% of the remaning 50%. this is applicable up to €23.000. Makes an effective tax of 10%. To this you add the CSG tax (social charges) with a fixed rate of 17,2% of the remaining taxable income. Makes an effective tax of 18, 6% in total.

  2. With the REEL régime, a full set of profit and loss accounts must be filed to justify the costs offset against income. Deductible charges are the “real” running costs related to the rental activities (mortgage, interests, taxes foncière, professional premises tax, taxe de séjour, insurance, management fees (Riviera Hostify costs of 25%), cleaning, maintenance and repairs, advertising, accountancy fees, bank charges, utilities) as well as an annual allowance for depreciation related to the value of the property. The P&L can often result in a loss on paper and therefore ZERO income tax and social taxes are due in France. The results of the P&L are filed in the annual income tax return. To this you add the CSG tax (social charges) with a fixed rate of 17,2% of the remaining taxable income.

But you have to choose either 1 or 2. You cannot change back the coming year.

It may be easier to be taxed under the standard micro tax status, it is fiscally more advantageous to be taxed under the  régime réel if your eligible costs are greater than the allowances available under micro tax status. 

It may be easier to be taxed under the standard micro tax status but it can be fiscally more advantageous to be taxed under the régime réel if your eligible costs are greater than the allowances available under micro tax status.

Buy and let the property with a mortgage and you are able to deduct interest costs, provided you choose to be taxed on the basis of the régime réel.

If you choose to be taxed under micro status, then the tax allowance for furnished lettings (particularly gites and chambres d’hotes) is more generous than that for unfurnished lettings, but the level of demand and rents may be lower for furnished accommodation, so you need to weigh up what works best for your situation. 

conclusion

You will need to submit a tax declaration of your rental income to both the French authorities and to your home country. France has a double taxation agreement with most countries (Sweden 1991:673) and therefore it’s unlikely that you’ll need to pay tax twice. But you may have to pay the difference if the tax in France is lower than the amount in your home country.

Tax-Rental-permission-taxation-France-Guide-Meuble-de-Tourisme
Rental-permission-taxation-France-Guide-Meuble-de-Tourisme
French Rental Income for Non-Residents

Meublé de Tourisme

The “Meublé de Tourisme” is a county apartment registration number. Since January 1st 2019 the French law has made it is mandatory to obtain a “Meublé de Tourisme”. If you are going to rent out your property you have to apply for a “Meublé de Tourisme”. MdT is the county property registration number. It must be stated on the platforms we use. We help you out for a fee.

If you want to register it yourself (for free), please do this as soon as possible. You apply for it via the website of your Taxe de Séjour county. For more information visit Taxesejour.fr and Service-Public.fr

To register click on your city below.

Nice (For Nice there are two permissions to apply for 1) Meublé de Tourisme (online registration) 2) A Temporary Authorization for a change of use, which you have to fill in this form and sent to Ville de Nice.) 

Cannes (online registration)  

Antibes/Juan les Pins (Currently registrations can only be done manually by filling in this form and sent to Ville d’Antibes Juan-les-Pins)

Métropole Nice Côte d’Azur (online registration)

 
Riviera Hostify can on behalf of you obtain it, but we will to charge you an extra 50 EUR for this service.

Meublé de Tourisme & the French law

  1. A new law requires Airbnb to send tax data to the French authorities directly, rather than leaving it up to the individuals. The tighter controls were introduced after a hotel lobbying group convinced the country’s parliament to pass the law in an effort to curb Airbnb’s growth in France.

  2. The French tourist tax (taxe de séjour) is now deducted directly from Airbnb according to an agreement between tax authorities and Airbnb. Airbnb´s properties are now classified under the rental category of furnished lets or meublés touristiques non-classés, and a charge of up to €4.40 per person per night is added when users book a stay.

  3. Homeowners are allowed to sublet their main residence as short-term lets for a maximum of 120 days a year and are required to seek permission from the local authority to offer short-term lets. So, anyone wishing to list their French property on a platform must register it with the authorities and display their registration number on their listing.

Exemple 1: MICRO-régime

 

I rent my apartment for 30 days, and earn €20 000 per year.
How much will I pay in taxes in France?

I declare according to the “MICRO-BIC-régime”.
(I benefit from an automatic 50% tax deduction).
For an income of €20 000 in one year, I pay taxes on 50%  of my annual income,
at the rate determined by my tax bracket. If my tax rate is 20% this equates:
€20 000 x 50% = €10 000 x 20% = €2 000 of income taxes.
+
Added to this amount a fixed rate of 17,2% of CSG tax (social charges), 
e.g. 
€20 000 x 50% = €10 000 x 17,2% = €1 720 of CSG tax.
The total of the tax is therefore 
€20 000 x €1 720 = €3 720/€20 000 = 18,6%

 

 

Exemple 2: REEL-régime

 

I rent my apartment for 30 days, and earn €20 000 per year.
How much will I pay in taxes in France?

I declare according to the “REEL-régime
I have €20 000 in income and €15 000 in actual costs divided in:
cost for management (Riviera Hostify), cost for an A/C, cost of interest, 
and mortgage and so on.
€20 000 – €15 000 = €5 000 x 20% = €1 000

Added to this amount a fixed rate of 17,2% of CSG (social charges), 
e.g. 
€20 000 – €15 000 = €5 000 x 17,2% = €860 of CSG tax.
The total of the tax is therefore 
€1 000 + €860 = €1 860/€20 000 =  9,3% 

 

 

Meublé-de Tourisme-taxesejour-french-law-rental

Swedish taxation

Swedish rental activity rules and regulations for Swedish citizens

a) Taxation 

If you rent out a private residential property located abroad, you will be taxed in the same way as if the property has been in Sweden. This means that you are taxed of your revenue. The tax of the revenue is 30 percent. First you use a standard deduction of SEK 40,000. Then you deduct 20 percent of the rent. You may not make larger deductions even if your actual expenses have been higher. The deductions must not exceed the income. Please use the help form for Rental etc. (SKV 2199) to calculate any surplus. You must report the surplus at item 7.3 on the income declaration.

 

b) VAT

Rental of a room or apartment subject to VAT if the rental covers more than 16 weeks during a year and if the turnover amounts to 50,000 SEK or more.

Exempel: Swedish taxation 

I rent my apartment for 30 days, and earn €20 000 per calendar year. How much will I pay in taxes in Sweden? 

I have €20 000 in rental income. I can deduct €4 000 in standard deductions.
Remaining €16 000. I can deduct an additional 20% on rental income = €16 000 – €4 000. 

Remaining is €12 000. On these, I pay a tax of 30% = €36 00. €20 000 – €4 000 = €16 000 -€4 000 = €12 000 x 30% = €3 600. €3 600/€20 000 = 18%

See example 1. The difference is minimal.

 

Riviera Hostify cooperates with the Swedish & French tax specialist Charlotta Gauci

If you have any questions please don’t hesitate to contact us tax@rivierahostify.com

error: Content is protected !!