Vacation Rental Advantages Explained

 

Advantages for renting

With vacation rental you can benefit from several advantages. Some tips to make best use of the rent of your apartment.

Freedom

With vacation rental you can control the availability of your apartment. It will only be rented during the period that you would have decided before. It therefore remains free for you if you want. Consequently your apartment is available when you want, except if you have already agreed for renting it and if it has been confirmed to the tenant.

Security

Receiving the payment of the rent is safe. The vacation rental is mainly aimed to professionals coming to Paris with their society, university, international body…

Profitability

Regarding your "pied à terre", the vacation rental allows to return on your investment during your absence and to make up for the inherent expenses to your apartment.

As an investor, the furnished rental takes into account your financial aim and allows to make the best of your investment.

Maintenance

Rental allows to maintain your apartment. For short term rental, the owner can observe the cleaning of the apartment. Thus, your apartment will not deteriorate. You can feel free!

Tax definition of professional & non professional owner for

Taxation for furnished rental can be different regarding whether the person who rents is professional or non professional.

AMOUNT OF THE BENEFITS OF FURNISHED RENTAL

AMOUNT OF THE BENEFITS OF FURNISHED RENTAL THE TENANT IS REGISTERED AT THE R.C.S. THE TENANT IS NOT REGISTERED AT THE R.C.S.
Benefits <= 23000 euros and revenue of furnished apartments inferior to other revenues Non professional Non professional (1)
Benefits <= 23000 euros and revenue of furnished apartments >= to other revenues Professional Non professional (1)
Benefits > 23000 euros Professional Non professional

(1) We remain a professional renter if it is the commercial court that refused to register you on the trade and societies register.

Income tax for residents

Renting furnished apartment even if you are non professional– is a commercial activity. The benefits are therefore taxed (income tax for residents) according to the category of industrial and commercial benefits (called “bénéfices industriels et commerciaux” or “BIC” in French) and not according to property tax.

There are two main taxes :

  • “Régime des micro entreprises”
  • “Régime du réel simplifié”

“Régime micro BIC”

It is the regime of common law which is available as soon as your benefits are lower than 76300 euros.
Under this regime, rental revenues are granted 68% fixed allowance, with a minimum of 305 euros.
This allowance is aimed to cover all fees that you have to pay during a year. Therefore you can not deduct fees for the “real amount” and even not the deducted part for the social tax. Moreover you can not declare your losses.

Formality

Declare the gross amount of your rental revenues -without deducting any fees- in the 2042C notification, page 2 paragraph 5, box C (lines NO to PO). Join the special notification n°2042 P regarding the local tax on businesses. Send everything with your notification.

Depot date :

The notification of your revenues (during the year N) have to be left in your tax collection office, at the latest the 5th April of the year N+1 at midnight.

Régime réel simplifié

This regime is available if your rental revenues are between 76300 euros and 763000 euros.
The non professional Renter –who comes under the micro BIC regime-, can opt for the “régime du réel simplifié” by asking it before the 1st February of the year. The option is addressed to the tax collection office with a plain unheaded paper. It will be available and irrevocable during two years.
This option is interesting only when your deducted fees are higher than a 72% allowance. You can also deduct a chargeable deficit on your global revenue for the following years.

Formality :

Fill in the professional results notification n°2031 and its appendixes 2031 bis and ter. Join the tax tables n°2033 A to G. Report your professional net result on the notification n°2042C, box B (line KD to MD or KJ to MJ if you did not join registered center) and your non professional net result box C (line ND to PD or NJ to PJ).

Income tax for non residents

People living not in France who have an accommodation in France have to subscribe a notification of revenues

The taxation of these people is available only under international conventions with France. (See the conventions on the website Impôts.Gouvernement in the part “Documentation”).

Taxation for non resident is the same as for residents :

  • “Régime des micro entreprises”
  • “Régime du réel simplifié”

See paragraph above.

The difference is the taxation rate, equal to 25% of the net taxable revenue.
The difference is that the rental revenues are not subject to the social tax -called CSG in French.

Formality:

The notification should be made every year at the tax collection office for non residents (Centre des Impôts des Non-Résidents) :

9, rue d'Uzès
75084 PARIS Cedex 02
Tél. : 01 44 76 19 00
e-mail: cinr@dresg.net

depot date :

The depot date for notifications is established according to the place of residence of the taxpayer.

  • Europe and countries of the coastal Mediterranean: before the 30th April
  • Africa (except the countries of the coastal Mediterranean) and North America: before the 15th May
  • Central America and South America: before the 30th May
  • Asia (except the countries of the coastal Mediterranean), Oceania and other countries.

Local tax on businesses

Renters have to pay the local tax on businesses.

Council tax

The accommodations which are subjected to the council tax, are not subjected to the local tax on businesses.
As an owner (not living in the accommodation), you will not pay this tax. Moreover, the tenant being in the accommodation on the 1st January will not pay this tax but a tourist tax. If you do use your accommodation punctually, this tax will be due for payment.
The council tax is due by the owner when this latter use his accommodation, apart from the renting periods.
s Regarding the tenants, they personally have to pay the council tax if they use permanently and exclusively, and even when the renter is due to pay the local tax on businesses.
In case of a short term rental, the tenant will not have to pay the council tax but the tourist tax.

Formality:

The council taxi s yearly established, according to the situation on the 1st January of the taxation year.
You are not subjected to a notification. A taxation notice is automatically sent to you by the local tax office. The council taxi is to be paid at the accounts department.

Claiming :

A notice is automatically sent to every taxpayer on the 1st January. If you receive this notice, you just have to send a claiming to the local tax office, in order to ask for an exemption. Join to your claiming :

  • A copy of your taxation notice.
  • A letter explaining that the flat is aimed to furnished rental for short term and is never personally used by you.
  • Every useful written proof. PARISIAN HOME will be glad to give you a statement with the rentals made during the year.
  • Property tax

    The property tax is yearly due by the owner or the usufructer of the building. It is established for the whole year, according to the situation on the 1st January of the taxation year. The cadastral revenue is the basis of the taxation. It is equal to the value of the cadastral rental with an allowance of 50 %.

    Formality:

    You are not subjected to a notification, except for new or restored constructions.
    A taxation notice is automatically sent to you by the local tax office.

    Tax on rental income

    The tax on rental income is due for the furnished rental, which are not subjected to the VAT, made in buildings constructed for more than 15 years.
    The tax is equal to 2.5% of the amount of net revenues coming from the rental during the previous civil year.
    How to notify?

    Mention on the notification 2042, page 3 §4, line BL, the amount of the gross revenues.

    Social tax (CSG)

    Revenues coming from furnished rental are subjected to the social tax CSG.

    Tax for vacant accomodation

    The tax is due for each vacant accommodation –vacant for minimum two consecutive years, on the 1st January of the taxation year.

    An accommodation is not considered as vacant if it is occupy at least 30 consecutive days during each year of the referent period.

    The tax is not due in case of vacancy for reasons beyond the taxpayer’s control.

    Claiming :

    A notice is automatically sent to each taxpayer who does not pay the council tax.. If you receive this notice, you just have to send a claiming to the local tax office before the 31 December 2005, in order to ask for a exemption. Join to your claiming: - A copy of your taxation notice.
    - Every useful written proof. PARISIAN HOME will be glad to give you a statement with the rentals made during the year.

Vacation Rental Advantages Explained

Advantages for renting

With vacation rental you can benefit from several advantages. Some tips to make best use of the rent of your apartment.

Freedom

With vacation rental you can control the availability of your apartment. It will only be rented during the period that you would have decided before. It therefore remains free for you if you want. Consequently your apartment is available when you want, except if you have already agreed for renting it and if it has been confirmed to the tenant.

Security

Receiving the payment of the rent is safe. The vacation rental is mainly aimed to professionals coming to Paris with their society, university, international body…

Profitability

Regarding your "pied à terre", the vacation rental allows to return on your investment during your absence and to make up for the inherent expenses to your apartment.

As an investor, the furnished rental takes into account your financial aim and allows to make the best of your investment.

Maintenance

Rental allows to maintain your apartment. For short term rental, the owner can observe the cleaning of the apartment. Thus, your apartment will not deteriorate. You can feel free!

Tax definition of professional & non professional owner for

Taxation for furnished rental can be different regarding whether the person who rents is professional or non professional.

AMOUNT OF THE BENEFITS OF FURNISHED RENTAL

AMOUNT OF THE BENEFITS OF FURNISHED RENTAL THE TENANT IS REGISTERED AT THE R.C.S. THE TENANT IS NOT REGISTERED AT THE R.C.S.
Benefits <= 23000 euros and revenue of furnished apartments inferior to other revenues Non professional Non professional (1)
Benefits <= 23000 euros and revenue of furnished apartments >= to other revenues Professional Non professional (1)
Benefits > 23000 euros Professional Non professional

(1) We remain a professional renter if it is the commercial court that refused to register you on the trade and societies register.

Income tax for residents

Renting furnished apartment even if you are non professional– is a commercial activity. The benefits are therefore taxed (income tax for residents) according to the category of industrial and commercial benefits (called “bénéfices industriels et commerciaux” or “BIC” in French) and not according to property tax.

There are two main taxes :

  • “Régime des micro entreprises”
  • “Régime du réel simplifié”

“Régime micro BIC”

It is the regime of common law which is available as soon as your benefits are lower than 76300 euros.
Under this regime, rental revenues are granted 68% fixed allowance, with a minimum of 305 euros.
This allowance is aimed to cover all fees that you have to pay during a year. Therefore you can not deduct fees for the “real amount” and even not the deducted part for the social tax. Moreover you can not declare your losses.

Formality

Declare the gross amount of your rental revenues -without deducting any fees- in the 2042C notification, page 2 paragraph 5, box C (lines NO to PO). Join the special notification n°2042 P regarding the local tax on businesses. Send everything with your notification.

Depot date :

The notification of your revenues (during the year N) have to be left in your tax collection office, at the latest the 5th April of the year N+1 at midnight.

Régime réel simplifié

This regime is available if your rental revenues are between 76300 euros and 763000 euros.
The non professional Renter –who comes under the micro BIC regime-, can opt for the “régime du réel simplifié” by asking it before the 1st February of the year. The option is addressed to the tax collection office with a plain unheaded paper. It will be available and irrevocable during two years.
This option is interesting only when your deducted fees are higher than a 72% allowance. You can also deduct a chargeable deficit on your global revenue for the following years.

Formality :

Fill in the professional results notification n°2031 and its appendixes 2031 bis and ter. Join the tax tables n°2033 A to G. Report your professional net result on the notification n°2042C, box B (line KD to MD or KJ to MJ if you did not join registered center) and your non professional net result box C (line ND to PD or NJ to PJ).

Income tax for non residents

People living not in France who have an accommodation in France have to subscribe a notification of revenues

The taxation of these people is available only under international conventions with France. (See the conventions on the website Impôts.Gouvernement in the part “Documentation”).

Taxation for non resident is the same as for residents :

  • “Régime des micro entreprises”
  • “Régime du réel simplifié”

See paragraph above.

The difference is the taxation rate, equal to 25% of the net taxable revenue.
The difference is that the rental revenues are not subject to the social tax -called CSG in French.

Formality:

The notification should be made every year at the tax collection office for non residents (Centre des Impôts des Non-Résidents) :

9, rue d'Uzès
75084 PARIS Cedex 02
Tél. : 01 44 76 19 00
e-mail: cinr@dresg.net

depot date :

The depot date for notifications is established according to the place of residence of the taxpayer.

  • Europe and countries of the coastal Mediterranean: before the 30th April
  • Africa (except the countries of the coastal Mediterranean) and North America: before the 15th May
  • Central America and South America: before the 30th May
  • Asia (except the countries of the coastal Mediterranean), Oceania and other countries.

Local tax on businesses

Renters have to pay the local tax on businesses.

Council tax

The accommodations which are subjected to the council tax, are not subjected to the local tax on businesses.
As an owner (not living in the accommodation), you will not pay this tax. Moreover, the tenant being in the accommodation on the 1st January will not pay this tax but a tourist tax. If you do use your accommodation punctually, this tax will be due for payment.
The council tax is due by the owner when this latter use his accommodation, apart from the renting periods.
s Regarding the tenants, they personally have to pay the council tax if they use permanently and exclusively, and even when the renter is due to pay the local tax on businesses.
In case of a short term rental, the tenant will not have to pay the council tax but the tourist tax.

Formality:

The council taxi s yearly established, according to the situation on the 1st January of the taxation year.
You are not subjected to a notification. A taxation notice is automatically sent to you by the local tax office. The council taxi is to be paid at the accounts department.

Claiming :

A notice is automatically sent to every taxpayer on the 1st January. If you receive this notice, you just have to send a claiming to the local tax office, in order to ask for an exemption. Join to your claiming :

  • A copy of your taxation notice.
  • A letter explaining that the flat is aimed to furnished rental for short term and is never personally used by you.
  • Every useful written proof. PARISIAN HOME will be glad to give you a statement with the rentals made during the year.
  • Property tax

    The property tax is yearly due by the owner or the usufructer of the building. It is established for the whole year, according to the situation on the 1st January of the taxation year. The cadastral revenue is the basis of the taxation. It is equal to the value of the cadastral rental with an allowance of 50 %.

    Formality:

    You are not subjected to a notification, except for new or restored constructions.
    A taxation notice is automatically sent to you by the local tax office.

    Tax on rental income

    The tax on rental income is due for the furnished rental, which are not subjected to the VAT, made in buildings constructed for more than 15 years.
    The tax is equal to 2.5% of the amount of net revenues coming from the rental during the previous civil year.
    How to notify?

    Mention on the notification 2042, page 3 §4, line BL, the amount of the gross revenues.

    Social tax (CSG)

    Revenues coming from furnished rental are subjected to the social tax CSG.

    Tax for vacant accomodation

    The tax is due for each vacant accommodation –vacant for minimum two consecutive years, on the 1st January of the taxation year.

    An accommodation is not considered as vacant if it is occupy at least 30 consecutive days during each year of the referent period.

    The tax is not due in case of vacancy for reasons beyond the taxpayer’s control.

    Claiming :

    A notice is automatically sent to each taxpayer who does not pay the council tax.. If you receive this notice, you just have to send a claiming to the local tax office before the 31 December 2005, in order to ask for a exemption. Join to your claiming: - A copy of your taxation notice.
    - Every useful written proof. PARISIAN HOME will be glad to give you a statement with the rentals made during the year.