France Tax laws state that France may levy all taxes related to real estate located in France. Since you enjoy rental income through VillaSud for the rental of your holidayhome, you are therefore likely liable to pay taxes in France.
The "good" news is that the tax burden is low. For a classified property it it around 8%. It is even possible that it is zero.
For companies, the corporate tax amounts to 15% to 25%, depending on the specific situation. If the company distributes the profit as dividend, then also dividend tax must be paid.
If your property is privately owned you are obliged to declare your taxes. Doing so is your responsibility. The declaration is made at the tax office for foreigners called SIPNR.
This page of Le site officiel de l'administration française explains it well. We have tried to translate the info into the following summarry.
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Priavtely owned
In France, there are 2 options in how to file your income taxes when renting out furnished private property. Depending on the amount obtained, you can choose between a micro-BIC regime or a regime reël.
Regime reël; All costs incurred for the operation of a furnished rental activity (costs of services provided by VillaSud, energy, water, maintenance, insurance, property taxes, depreciation and interest) are deductible from the rental income, including depreciation on the property.
Micro Regime BIC. (Benefices Industriels et Commerciaux); A fixed percentage of the rental income applies as a deductible item. If your property classified, it is 71%, if not classified, it is 50%.
Is your villa:
- 1. Classified and your gross rental income;
- Is less than €176,200, you can choose between the BIC regime with a fixed deduction of 71% or the réel regime.
- Is it more than €176,200, you will automatically fall under the réel regime.
- 2. NOT classified with gross rental income;
- less than €76,200 then you have a free choice regime BIC with a fixed deduction of 50% or regime réel.
- Is it more than €76,200, you will fall automatically under the réel regime.
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Example Bic Regime
Tax rates (2022) for residents outside France.
- Up to €26,070 27.5%
- On the excess, 37.5%
- Case 1.
- Your property is classified with a gross rental income of €50,000.
- Fixed deduction is 71%, so the remainder is 29% x €50,000 as taxable income, being €14,500
- Taxes to be paid; €14,500 x 27.5% equals €3,985.
- (8% on €50,000)
- Case 2.
- You property is NOT classified villa with a gross rental income of €50,000.
- Fixed deduction is 50%, so the remainder is 50% x €50,000 as taxable income, being €25,000.
- Taxes to be paid; €25,000 x 27.5% equals €6,875.
- (13.75% on €50,000)
(In 2023, the amount of €176,200 will be increased to €188,700. (The amount of €76,200 becomes €77,700.)
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Company owned
If your property is registered in the name of a company, like a SCI, it is mandatory to file your annual corporate income tax return in France.
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Expert
Questions about your taxes? Please contact an expert accountant's firm for this.
We recommend that you file your French tax returns on time and pay the taxes due. Given the complexity of the French administration and tax returns, it is wise to have an expert accountancy firm assist you with this.
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Back to mainpage; Rentals & Taxes
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Disclaimer
We recommend that you file your French tax returns on time and that you pay the taxes due on time. Given the complexity of the French administration and tax returns, it is wise to have an expert accountancy firm assist you with this.
VillaSud strives to always offer correct and up-to-date information on this website. Although this information has been compiled with the greatest possible care, VillaSud does not guarantee the completeness, correctness or topicality of the information. The legal information on the website is of a general nature and cannot be considered a substitute for legal advice. Please let us know if you find any errors or ambiguities! Then we can correct it as soon as possible.
