Renting your property in France
Investing in France
If you are thinking of investing in French property, whether it be a ski chalet in the French Alps or a town house in Paris for long-term rental, you need to know that the French system can be complex and that you cannot simply rent out a property without carrying out various formalities and pay various charges.
If you let out your property all year-round to French residents (unfurnished), this is classed as private income and no registration formalities are required. You simply declare the income directly onto your annual non-resident income tax return*.
If you let out your property furnished for long periods (several months to a year), this is classed as a non-professional commercial income. You need to register the rental activity, pay French income tax and social taxes, without welfare contributions, whatever the level of income you earn. You may be obliged to file financial accounts and you will have to declare the income on your annual non-resident tax return*.
For short-term furnished rentals, if your annual rental income does not exceed €23,000 gross, the same rules as long-term furnished rental apply and generally this remains a non-professional commercial income. However, should your income exceed this figure, not only would you need to register the activity but, in addition to income tax, you would be obliged pay into French welfare#.
If you provide hotel-type services alongside the accommodation, this is classed as a professional activity in France and you will be obliged to pay into French welfare, as well as to pay income tax on any profits. VAT may also apply in some cases.
As UK residents, you have to declare the income in France and pay any relevant income tax and social taxes in France. You also have to declare the income on your UK self-assessment and a tax credit will be applied to cancel out any French tax paid.
for self-catered furnished rental or rental with hotel-type services, there will be a professional premises tax to pay (business rates) in addition to the local property taxes.
Now that the UK has left the EU and until a new bilateral social security agreement is signed, these welfare contributions will be due even if you pay NIC in the UK.