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Can you own a holiday home in France and not go bankrupt?


BenC

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1 hour ago, EuroTr@sh said:

It always used to be this lot

https://impots.dispofi.fr/centres-des-impots/service-impots-particuliers-non-residents-centre-finances-publiques-noisy-le-grand/a-457afd

it was a whole separate department, they issued different forms, had different deadlines etc, and non residents tax is calculated differently obviously.

But the tax office has reorganised itself this year hasn't it so I don't know if it is still the same address, I am afraid you will have to google for yourself if you really want to know (or ask your kids to do it for you).

You're burbling though - there are lots of non residents, Brits and other nationalities, who own and rent out property in France, and/or run other types of business in France, some of them no doubt visit France from time to time under the 90/180 Schengen visa waiver or on a tourist visa and I suppose some never set foot here. It's not a problem, France is quite happy for non residents to invest in France and pay tax here. The issue is if those people want to actually live in France, that's when it gets more complicated. Owning rental properties or having business interests in France does not automatically give you the right to live here.

Just like there are lots of Brits who live in France but get their income from renting out properties in the UK. They pay their tax on the rental income in the UK, as non residents. Being liable to tax in a country and being regarded as tax resident in that country, are two separate things.

What income gets taxed where is all set out in tax treaties, loads of people pay tax in two or more countries, it's not too unusual. I guess every country has a system for taxing non residents. I am sure you know all this if you stop and think about it - give your head a good shake and get the marbles back in their right places.

 

 

A) You have not given me an answer....apart from...'it used to be this lot'. 

B) I just want to know (or the OP rather) we he declares and pays his tax.

C) We are living in Brexit world. 

 

 

 

Edited by alittlebitfrench
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So you buy a property (300 k) to rent out...

You pay..

1) Tax hab, fonciere (or whatever it is called today) water, heating, electricity, wifi...and other charges.

2) A management company to look after the property and maintain the expensive pool.

3) You pay advertising costs to rent out the property and manage the bookings.

4) You pay a one off Notaire fee (lets say 30 k) to buy the property. (That will take 3 years at least to pay back) 

5) If you buy with a mortgage you pay interest rate on your loan. (That will take 10 years to pay back)

6) You pay tax on any rental income from the property.

7) You pay for the upkeep of the property. That is everything from the roof to the fridge. 

 

Can someone explain to me how you make money or even break even in a market that is completely saturated with holiday properties ?

 

 

 

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8 minutes ago, alittlebitfrench said:

So you buy a property (300 k) to rent out...

You pay..

1) Tax hab, fonciere (or whatever it is called today) water, heating, electricity, wifi...and other charges.

2) A management company to look after the property and maintain the expensive pool.

3) You pay advertising costs to rent out the property and manage the bookings.

4) You pay a one off Notaire fee (lets say 30 k) to buy the property. (That will take 3 years at least to pay back) 

5) If you buy with a mortgage you pay interest rate on your loan. (That will take 10 years to pay back)

6) You pay tax on any rental income from the property.

7) You pay for the upkeep of the property. That is everything from the roof to the fridge. 

 

Can someone explain to me how you make money or even break even in a market that is completely saturated with holiday properties ?

 

 

 

Our biggest rental was grossing £20K+ per year until the owner sold in 2021, after costs/tax etc he earned £5K net plus he got to holiday here for several weeks, with the increase in property prices recently he made a profit when he sold and the house was only on the market a week, it went for full ask with competing offers, the new UK owners bought 'blind' and didn't see the property until after they completed. 

Brexit makes no difference to non EU residents buying and renting out their property here.

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Just to swerve away from the tax implications and to try to return to the OP’s original question.

I don’t know precisely what the cost of renting a nice property with the qualities that the OP cited, but you’d have to be looking at something around €2500 - €3000 for a fortnight wouldn’t you?  Somewhere that’s familiar and ‘suits’ your family needs could well stack up financially and provide the additional possibilities of additional ‘out of season’ breaks (e.g. Easter) and being able to rent out to friends.

Our Belgian 2nd home neighbours are a case in point.  They normally spend anything up to 5 weeks down here in three ‘dollops’, and rent out to friends (only ever people they know) and make about €3k - €4k each Summer from that.  

They’re fortunate.  Another (French) neighbour takes care of the cleaning and washing of linen etc, so everything is ready for them or other guests.  They employ a pool maintenance firm who look after all that - he has a contract which isn’t cheap (several years ago, he told me that it was €55 / week for about 20 weeks - more now doubtless).

The point I’m making is, apart from the financial viability, the biggest headache must be dealing with having a property prepared and ‘ready to go’ for you or anybody else who may be renting it.  He’s had electrical failures, bee infestations (happily dealt with properly by an apiculteur), swimming pool going green on him and plumbing issues.  The thing is that his immediate neighbours keep an eye on things and can take action knowing that he’ll appreciate things.  It might not be the case with every property you might acquire.

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1 hour ago, DraytonBoy said:

 

Brexit makes no difference to non EU residents buying and renting out their property here.

Of course....I guess.

But if I rent out a property in France (for holidays or whatever) I have to declare that income on my tax forms in France. That is normal. 

So if a Brit or someone from any 'non European' country who does not reside in France but rents out their property in France, they have to declare that income and pay tax in France.

Imagine you are from New Zealand or Russia or wherever and you own an expensive chalet in the French Alpes. You rent it out at 5000 K a week over 16 weeks. That is 80 K revenue. You have to pay tax on that income in France. Like any other business. 

My question is where and how ?

I have no idea of the answer BTW. 

 

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3 hours ago, Gardian said:

 

The point I’m making is, apart from the financial viability, the biggest headache must be dealing with having a property prepared and ‘ready to go’ for you or anybody else who may be renting it.  He’s had electrical failures, bee infestations (happily dealt with properly by an apiculteur), swimming pool going green on him and plumbing issues.  The thing is that his immediate neighbours keep an eye on things and can take action knowing that he’ll appreciate things.  It might not be the case with every property you might acquire.

.......... and I also meant to say that knowing who to contact in the event of (whatever) problem that might arise, is ...... a problem!  Hard enough for us as ‘locals’ in truth, getting reliable artisans out at short notice.

When you’re resident, it’s a bit easier.  From a distance, or when you fetch up on a Saturday evening to a green pool, not so clever.

I wouldn’t want to put the OP off acquiring a property wherever in France.  Eyes open though !

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10 hours ago, EuroTr@sh said:

Good work ET. I knew I could rely on you.

What I trying to say is that once you take out all the costs (and there are many) for renting the property out and your tax liabilities you really are unlikely to break even nevermind make money. Maybe an apartment (ski/beach) would work. In our case we don't do it, because we have done the maths and it is not worth the high blood pressure. 

Also, if you introduce a management company for cleaning, change overs, sorting out the god darn swimming pool, you really have had it. Well unless it is a large gîte type complex with a golf course then maybe you could make money. But you are not earning much. That is for sure. 

Lastly, if your level of French is not there (comunicating with artisans, renovation, accountacy) you are going to get expensively stung by everyone who sees you coming. And not forgetting buying the property where the British seem to think the asking price of the property is the price of the property. So if you start paying asking prices you have lost before you have even started.

* Oooohh...I forget about all the French legislation regarding rental properties which there is lots and that seems to change everyday. It only takes an insurance liabilty situation (someone has an accident) and you could end up paying thousands in fines for a non conforming property. 

So yeah, ski flat is best for the OP (given they like skiing) and give the keys to your friends in the UK for free. Or ask them to buy you a pint or two or three.

Et volia.

Edited by alittlebitfrench
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Well I suppose the thing is that just by owning the property you have the taxe d'hab and taxe fonc to pay, and the maintenance costs etc etc etc, you still have to communicate with artisans if necessary, etc. So if you have decided you want to own a property, then renting it out is going to help offset these costs to some extent. Perhaps you will break even on owning the property, perhaps you won't, and I suppose it will depend whether or not you factor into the equation the cost of your time and hassle and as you say the high blood pressure in organising the rentals and dealing with the admin. Certainly you are unlikely to get rich on it. But either way if you do rent it out you will get some of the costs back, whereas if you don't rent it out you won't. 

Thing is ALBF, airbnb is full of people doing this, so although it's not a thing I would ever contemplate nor you by the sounds of it, loads of peeps do it. Or they give it a go at least, how many of them carry on long term is a different question.

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