Newcomer seeks help!

[NewinFrance]

I'm sure that many of our questions have been raised before - please just refer us to the correct thread if they have!

We are buying a house here which has an attached Gite, previously only used for members of the current owners' family but which could provide an useful addition to our pension. We have past experience of running a small holiday home in the UK but our French is very poor at the moment (but we are learning as fast as we can!)

We are finding it difficult to sift the vast, and sometimes contradictory, amounts of advice about renting this Gite to non-family members.

Do we actually need to register as a business or just register the Gite with the Marie and declare our French income? If we do start an 'official' business which sort and how does that effect our current E106 status?  Tax, cotisations, microbics... help!

Sorry for so many questions but there seems to be wealth of experience on this forum and some help would be greatly  appreciated

 

 

[Anna]

Hi

You can let out your gite and you do not register with anyone. You only have to register with your Marie if you want to do B&B. You must, of course, fill in a French Tax form and state your income on there in order to pay the tax due on your gite income. This is very straightforward and, unless you have other complicated income issues, it should be unecessary to employ an accountant to fill in your French tax return form.

As you have an E106 form, this will entitle you to a Carte Vitale. Do not try to register as an "official business" because, if you did register, you would be liable to pay high cotisations, from which you would not receive any benefit.

When your E106 runs out, if this is before you become eligible for an E121 form, then you will be liable to make a contribution from your income to enable you to continue to hold a Carte Vitale. If you will not have enough income to pay into the system, then your Carte Vitale will be withdrawn.

Hope this helps

Anna

[NewinFrance]

Thanks Anna.

We were wondering about the 'small business' angle for a couple of reasons, first for getting any allowance against income for the set-up costs (furnishings etc) and the running costs (power, water, cleaning etc).

Secondly with the prospect of having to get private health insurance for the four years between our E106s expiring and being eligible for our E121s under the new rules we wondered whether business 'cotisations' would be cheaper?

Something else which has crossed our minds is insurance, we'll need some indemnity policy, how easy//expensive is this to arrange?

 

[mayday]

Hi newinfrance

it cost me an extra €29 for the full indemnity for renting out our gite for 9 months of the year

[Cerise]

You will need to have insurance for your gîte, but bear in mind that you should include a clause in your letting that your tenants should also have appropriate insurance.  In French law if your tenants rip your swimming pool liner/set the sofa on fire/burn the place down it is expected that it is THEIR insurance which will pay.  Most French people are automatically covered for Résponabilité Civile, but if your guests are from elsewhere you should check that they have appropriate travel insurance as a claim could be protracted and you could encounter difficulties in getting a payout if they were not appropriately insured.

[cooperlola]

Cotis are high but as you say, they may indeed prove cheaper than private health care.  Indeed if you have any sort of pre-existing or chronic condition then you may find it well-nigh impossible to get cover for those anyway; this would mean that you were not complying with the law and your residence would be illegal - as you are obliged to have cover for all health expenses under the new regulations - including dental, optical, gp visits, medicines etc.  Many people whose E106s expire this weekend are registering their gites as businesses - having not done so in the past - in order to gain access to the state healthcare system.  From the healthcare point of view my own advice would be to investigate fully the comparative costs (and availability) of PHI versus paying cotis on your business, whilst your E106 is in force.

[NewinFrance]

Thank you everyone - we have a year left on the 106s and will look into the comparitive costs.

... and thanks for that hint on insurance, 'little' things like that can make a big difference!

[Thebiga]

Also remember that as soon as you start earning any money in france that your e106 dose not cover you anymore and that you need to be in the system.. I think. Perhaps someone else can tell you if this is true or not.

[cooperlola]

[quote user="Thebiga"]Also remember that as soon as you start earning any money in france that your e106 dose not cover you anymore and that you need to be in the system.. I think. Perhaps someone else can tell you if this is true or not.[/quote]Gites are an exceptional case.  I believe that you can, as Anna states above, have gite income whilst still on an E106 because income from them is classified differently here.  Somebody will correct me if I'm wrong but I believe this is an historical thing, dating back to the times when farmers let out cottages etc on their land for extra marginal income.

The dilema is that when the E106 expires, then it's PHI unless you have a business or find work - so registering a gite as a business may then be a better option both finacially, and from a "safety" point of view as - as stated above - PHI carries many caveats, excesses etc which can make it a poor option for some (although certainly not all, as it can be cheaper than the alternatives if your income is high and you are 100% healthy when you take it out.)