4. Taxation of Property Rental Income in France

1. 4.1. Non-Residents
   4.2. Summary of Tax Regimes
   4.3. Furnished Lettings
   4.4. Unfurnished Lettings
   4.5. Lodgings

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4.2. Summary of Tax Regimes for Rental Income

There are a number of different income tax regimes for rental profits, with the major distinction depending on whether you let furnished accommodation or unfurnished property.

If you let both, then each will taxed on a separate basis, using the applicable tax regime for each type of letting.

A second distinction is based on your turnover, with smaller landlords given some choice as to the basis on which they can be taxed.

In the following table we summarise the basic tax regimes. In these notes we do not consider the system of company taxation of property profits. This is unlikely to be advantageous unless you have substantial rental or other earnings.

However, it is possible to establish a fiscally transparent French property company, called a Société Civile Immobilière(SCI), and adopt the system of personal taxation outlined below, for use with unfurnished accommodation.

The basic differences in the various income tax regimes are as follows. These rates and thresholds are those applicable for 2011.

Table: Tax Regimes

	Furnished Accommodation		Unfurnished Accommodation
Tax Regime	Micro BIC	Regime Réel	Micro Foncier	Regime Réel
Max Turnover	€32,600 /€81,500	Unlimited	€15,000	Unlimited
Tax Allowance	50%/71%	Actual Costs	30%	Actual Costs

If you run a chambre d'hôte, gîte rural or a meublé de tourisme your turnover limit is €81,500, and you are granted a tax allowance of 71%. The lower turnover threshold and 50% tax allowance applies to other furnished lettings.

It is also possible to let property as an auto-entrepreneur, when you will pay tax as a fixed percentage of your gross rental income.

In collaboration with a good accountant/tax lawyer, you will need to assess your circumstances and take a view as to what best fits in your case. We describe each tax regime in further detail in the following pages.

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