Guide to Letting Property in France

2. Top Tips

  • There is ordinarily no need to register as a business if you let out property as a small landlord, particularly if you let unfurnished accommodation.

  • Nevertheless, if you let furnished accommodation it may be to your advantage to become business registered, which would then also allow you to obtain access to the health system.

  • Whatever your legal or business status, whilst it may be easier to be taxed under the standard micro tax status, it is fiscally more advantageous to be taxed under the régime réel if your eligible costs are greater than the allowances available under micro tax status.

  • Buy and let the property with a mortgage and you are able to deduct interest costs, provided you choose be taxed on the basis of the régime réel.

  • If you choose to be taxed under micro status, then the tax allowance for furnished lettings (particularly gites and chambres d'hotes) is more generous than that for unfurnished lettings, but the level of demand and rents may be lower for furnished accommodation, so you need to weigh up what works best for you.

  • Even though you may not be resident in France you are liable to French income tax on your rental earnings, although double taxation relief is normally available. Unfurnished lettings also face social charges.

  • Tenants have strong security of tenure, so take your time about the selection of your tenants, and make such enquiries as you consider necessary.

  • Neither does it make much difference that the letting may be furnished. Tenants of furnished accommodation have as much security of tenure as those of unfurnished property, provided it is their principal home.

  • You should be cautious about taking at face value anything you are told by a prospective tenant. You need to follow it up and dig deeper to get the confirmation you need.

  • Landlords are obliged to provide prospective tenants with certain survey reports, including properties let on a seasonal basis.

  • Even though you may have successfully let your property, it pays to maintain regular advertising, in order keep an eye on market trends.

  • Ensure you take out insurance against the non-payment of rent, for which purpose the income of the tenant cannot be greater than 33% (sometimes lower) of the rental.

  • Ensure you insist on one months rental/damage deposit at the start of the tenancy.

  • If you get the tenancy agreement signed via a notaire it provides greater certainty concerning the terms of the tenancy agreement, and slightly stronger rights in the event of non-payment of the rent.

  • Get at least one rental payment, or the deposit, paid by cheque, as you then have the bank details of the tenant, which may later be used in connection with rent arrears recovery procedures.

  • Ensure you engage a huissier to undertake an independent inspection of the property at the start and end of the tenancy.

  • Unless you formally terminate the tenancy in accordance with the proper procedures the tenancy is automatically renewed.

Next: Business Registration

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