Running a holiday home let from the U.K.

[french connection]

Wanted some advice really.  My mother lives in France but, following the death of my father last year, now wants to return to the U.K. to live.  Unfortunately she is unable to sell her French house at the moment, as it has subsidence caused by clay soil and very hot summers and she is waiting for the Government to pay compensation for the works.  

So she is looking at renting out her place as a holiday let.  Please can anyone let me know how this works in a legal sense and from a taxation perspective.  Also any tips and experiences from those who live in the U.K. and do holiday lets on your properties.

Many thanks

[JJ]

I will not comment on the tax and legal implications, but what I will advise is that if you are looking to rent out a place and you live in the UK, then the most important thing is to have someone who is reliable and trustworthy who can take care of the changeovers, cleaning, gardening, etc etc.

 

[freddy]

This is absolutley possible but may be more work than you anticipate, it is a large subject but I will outline what the big decisions that you need to make are.

Q1. Is it going to work - is it in an area that gets a lot of tourist traffic - is it an attractive holiday let, countryside, pool etc.?

A1. check out the various holiday house rentals sites and see what similar properties in the area are renting out at and how many weeks they are booked for.

Q2. Is the propoerty up to scratch?

A2. There is something of an oversupply of rentals at the moment and prices are lower than they were. If the house has been lived in and is suffering from wear and tear this will damage rentability on the current market. You are likely to have to spend some money bringing it up to standard, decoration, furnishings etc. To stand a reasonable chance you must really have all the things that make life easier e.g. I think a dishwasher is compulsory these days. If you are in the hot south and don't have a pool that will significantly reduce the number and price of bookings. Factor these and maintenance costs into A1 - note maintenance will be more than when you are living there - you may be prepared to live with a broken shower until yo ucan fix it 2 weeks later - renters will not!

Q3. Who is going to do changovers, cleaning etc.

A3. You have to have this sorted with someone reliable - the guests must have someone reilable to call when the toilet blocks and will expect the place to be clean - you can add the base cost of this to your rental e.g. 100 euros for cleaning plus 10 euros per person laundry which can be paid to your agent locally. I find you need three complete sets of bedlinen, towels etc.

Q4. How do you find your customers?

A4. Basically decide - do it yourself our agent. If DIY there are a number of choices, the cheapest route is to advertise on a rentals website - the most expensive is to hand the whole problem over to an agent (who might be able to help you with Q3 as well) - the middle road is adevertise with someone who does the internet and a brochure. - You pays yer money and yer takes yer pick. If you go doen the internet route you really need to set up your website as well.

Q5. Whats the tax position?

A5. Again a bit of big question and would be well adviced to take some advice, from your posting I assume that the owner will be tax resident in the UK, if this is the case the following applies. You will be liable for income tax on rental income in France but you can either deduct a standard chunk as expenses (72% if memory serves) or you can do itemised receipts. You are also taxed in the UK as part of your overall income but can offset the french tax paid against your UK bill (double taxation treaty) - but note that you can't do the percentage deductions for expenses for the UK, that has to be itemised. All round a bit of pain.

Q6. whats the legal postion?

A6. Not sure what you mean by this - as long as your mother owns the house she can rent it out- make sure you have laibility insurance but thats about it. As a UK resident you don't have to register it or anything.

[Loiseau]

I no longer let out a holiday home, but when I did (as a UK resident) I don't remember the tax being a major issue.

You have to get the right form from the French tax office.
Enter the equivalent in euros of your year's rental.
They deducted 50 per cent for expenses, and then charged I think 25 per cent of the remainder as tax, for which I had to send a cheque.  And if the amount of the tax came (at the time) to less than 2,000 francs (£200), then they waived it.

I am sure that some forum members who are currently letting would be able to tell you what the current forms are and how to download them.

In the UK, I told my accountant the gross rental, and produced any relevant receipts that could be set against it. I told her how much tax I had already paid in France, and the tax office set that against what I *would* have had to pay.

The only slight headache was that for future years (once I was in the "system") the French asked for the tax in advance, in staggered payments.  And even when I was no longer letting, they continued to send me these requests.  I think I have finally managed to stop them, but it took about three years!

 

But everything that has been said above, about equipping the house and making it appealing to renters is the first, and most important consideration.  You absolutely do not want peple arriving and then complaining that things are not up to scratch and demanding money back or alternative accommodation!  After all, you are taking their money in exchange for giving them the highlight of their year - a good holiday!

Also you might need to "de-clutter" a bit before letting.  People want to feel they are in their own space rather than roosting among somebody else's treasured knick-knacks.  And make sure the stuff you leave in the house is robust!  You don't want to leave slightly wobbly furniture, precious glasses and china etc.  Believe me, if they can break something - they will!  (I don't mean on purpose, but I was always amazed at the number of glasses that got broken or plates that got cracked; maybe people are less careful on holiday.)

Angela

 

 

[Harvey]

Hi Loiseau

I have sent you a pm!

[Chris]

One item from me! We no longer leave towels and tea towels for the guests; we just cover the bed linen and ask them to bring their own.  Hope that this helps.

Chris