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Business Plan Sanity Check


penfoldisking

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Been away for a couple of days (work) and just caught up on the posts.

not sure that some people read the posts properly.

We have an income of 20,000 euros already and between 400 - 500,000 for a property so will not need a mortgage.

One thing that did come across clearly is that understanding the french financial system is a challenge.

However ther are more imp[ortanat things to sort out.

I reckon a pool is essential, thoughts please.

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ltf: Sorry, but eslier has given the correct information. If your letting income (gross) exceeds 23,000 euros OR is more than 50% of your income, you must register with the CdC. Some departments have not yet caught up with this requirement, which may be why you have been given incorrect advice.

I reckon a pool is essential, thoughts please.

Yes, definitely; if you're more than 20 mins from the coast, a pool is a must.

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[quote user="penfoldisking"]

Hi,

We're looking for some comments/sanity check on our plan to buy and run a Gites Complex in Central/SW area of France.

We are a married couple (kids grown up and left) mid 40's & 50 who are looking to leave the rat race in UK but don't want to retire yet.

We have relatives living in France and we have lived in Europe before.

We plan on buying an existing Gites business (upto 450,000 euros) from the sale of our 2 properties in UK (1st just on the market) in the next 12 -18 months. So no mortgage to worry about. We have a private income/pension of 20,000 Euros per annum.

With the uncertain nature of bookings are we going to be able to survive?

(Sensible) Comments please.

Also PM me if you have any good links of property agents/private sales of gites complexes.

Cheers

 

[/quote]

We should be asking for your advice!

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[quote user="Jo Taylor"]

ltf: Sorry, but eslier has given the correct information. If your letting income (gross) exceeds 23,000 euros OR is more than 50% of your income, you must register with the CdC. Some departments have not yet caught up with this requirement, which may be why you have been given incorrect advice.

[/quote]

Jo Taylor, please could you quote me the relevant texte that says inscription with the Ch de Com is compulsory.

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Yes, I did, and it doesn't say anything about chambre de commerce registration being compulsory for locations meublées. To be honest, I didn't understand the relevancy of your post at all.

Doing a quick search, I have found this and this  (the second actually from a ch de com website), which are a lot clearer to me.

Sorry OP - in answer to your question, you could probably live quite nicely on and income of 20000€ per annum, do you really want the hassle of running gites? Sharing your personal space every summer, always knocking at the door for something or another, asking if you can take them to the doctors because they don't speak a word of English, breaking your furniture/crockery, taking divots out of the garden when they practice their golf, doing changeovers every Saturday in hot weather, all the ironing, finding things that don't work on Saturday that the guests never told you about and it is too late to get a plumber/electrician before the next guests arrive, other people's children everywhere, all the time. If so, then running gites is for you.

A pool is quite important for a decent income if you are inland.

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[quote user="ltf"][quote user="Jo Taylor"]

ltf: Sorry, but eslier has given the correct information. If your letting income (gross) exceeds 23,000 euros OR is more than 50% of your income, you must register with the CdC. Some departments have not yet caught up with this requirement, which may be why you have been given incorrect advice.

[/quote]

Jo Taylor, please could you quote me the relevant texte that says inscription with the Ch de Com is compulsory.
[/quote]

CODE GENERAL DES IMPOTS, Article 151 septies, sectionVII.

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[quote user="Jo Taylor"]

CODE GENERAL DES IMPOTS, Article 151 septies, sectionVII.

[/quote]

Jo, that doesn't say ch de com registration is compulsory. It simply describes the class of  loueurs

 
who are deemed to be "
professionnels" for the purposes of the

application of articles 150 U à 150 VH
l - they are loueurs who are registered &

who have income over 23000 euros (or earn at least half of their total income

from the rentals).

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New rules state that you must now be reg at your marie this new rule came into force 4 Aug 2007 J.O No 179 du 4 aout 2007 page 13103 text No 8  Décret no 2007-1173 relatiif aux chambres d'hotes et modifiant le code du tourisme.  Can be found on Legifrance service public de l'accès au droit (code du tourisme) artical 1 sec 2 Art D 324-13/15.But I suspect you dont want to hear about this either Phone or go to your Ch de Com and let us all know what they say. "Half the total income in France" if you dont have a job here, then any money earned is your total income, is it not? thus you must be registered. That is not to say you will pay any charges or Tax which I suspect is the main reason for the posting, but if may effect any capital gain if the house is sold.

Mel

 

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[quote user="ltf"]Yes, I did, and it doesn't say anything about chambre de commerce registration being compulsory for locations meublées. To be honest, I didn't understand the relevancy of your post at all.
Doing a quick search, I have found this and this  (the second actually from a ch de com website), which are a lot clearer to me.

Sorry OP - in answer to your question, you could probably live quite nicely on and income of 20000€ per annum, do you really want the hassle of running gites? Sharing your personal space every summer, always knocking at the door for something or another, asking if you can take them to the doctors because they don't speak a word of English, breaking your furniture/crockery, taking divots out of the garden when they practice their golf, doing changeovers every Saturday in hot weather, all the ironing, finding things that don't work on Saturday that the guests never told you about and it is too late to get a plumber/electrician before the next guests arrive, other people's children everywhere, all the time. If so, then running gites is for you.
A pool is quite important for a decent income if you are inland.
[/quote]

Thanks for finding those web pages.  I found the first one very interesting, especially the last few lines

"Exonération de taxe professionnelle (sauf exception) pour les personnes qui louent tout ou partie de leur habitation personnelle à titre de gîte rural, sous réserve de deux conditions :

- le logement ne constitue pas l'habitation principale ou secondaire du locataire,

- le gîte est classé "Gîte de France" dans les conditions prévues à l'article 58 de la loi n° 65-997

du 29 novembre 1965."

 

I assume the reason my tax office is telling me that I don't have to register as a business is because I fulfill all these requirements.  The gites are built in the old stables in the grounds of my home, and they are classified Gites de France 

 

Patrick 

 

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Patrick, taxe professionelle is something completely separate, not to be confused with income tax or business registration.

Taxe professionelle is normally payable by individuals and companies carrying out non-salaried work. It’s levied at between around 15 and 20 per cent (the exact percentage varies with the commune) of a ‘base’, which is currently 8 per cent of your annual income, including VAT. For example, if you earn €30,000 per year, your tax base will be €2,400; if taxe professionelle is levied at 20 per cent in your commune, you will pay €480 per year.

Taxe professionelle is assessed as follows: in your first year of French residence, you pay nothing; in your second year, you pay according to your earnings in Year 1 (pro rata if you moved to France part way through the year); in Year 3, your tax is again based on your Year 1 earnings, in Year 4 on your Year 2 earnings, and so on.

A gîte owner is exempt if the property is registered with Gîtes de France or another official organisation, e.g. Clévacances or the Comité Départemental de Tourisme. Exemption also applies where the property is your principal residence, provided the rental is ‘reasonable’. In effect, most bed & breakfast (B&B), gîte and letting businesses aren’t liable for taxe professionelle, but check with your accountant or local trésor publique.

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[quote user="Jo Taylor"]

Taxe professionelle is normally payable by individuals and companies carrying out non-salaried work. It’s levied at between around 15 and 20 per cent (the exact percentage varies with the commune) of a ‘base’, which is currently 8 per cent of your annual income, including VAT. For example, if you earn €30,000 per year, your tax base will be €2,400; if taxe professionelle is levied at 20 per cent in your commune, you will pay €480 per year.

[/quote]

It is worth noting that in the circumstance that a business owns a propery that is used solely for business purposes as a let, the taxe professionelle is levied but taxe d'habitation is not. The former is less than the latter.

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Hi Penfoldisking,

no great tax advice from me...leave that to the pros.  Regarding your gite business, I would be cautious about buying a "complex" - they can be a terror to sell at full value (so if you are buying a complex - bargain hard i.e. way below the asset value) and can be hard to sell a-bit-at-a-time, which would give you greater financial flexibilty.

How about buying up 2,3 or 4 seperate houses within a 5-10 minute radius of your home?  The buying process can be slow and steady - your intro into the world of French tourism is likewise slow and steady - you get a feel for local property and selling underperormers is easy.

Best of luck,

Ian

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