Tax Allowance for Rural Gîte Owners
Tuesday 07 October 2014
The French government have conceded that affiliation to the Gîtes de France should no longer be a prior condition of entitlement to a higher tax allowance.
In our July 2013 Newsletter we reported on a peculiar decision by the French government that required all rural gîte owners taxed as a micro-entreprise, and wishing to benefit from a higher tax allowance, must be affiliated to the 'Gîtes de France'.
This decision meant that where an owner was not affiliated to the Gîtes de France they would only be entitled to the standard fixed cost tax allowance of 50% against turnover, not the more generous allowance of 71% for tourist accommodation.
The decision by the government was published in their official tax bulletin in June 2013, and stated:
Pour être qualifiés de gîtes ruraux, les locaux meublés doivent être classés « Gîtes de France ». Cette qualification ne résulte pas d'un classement réglementaire mais est attribuée de manière autonome par l'association le Relais départemental des « Gîtes de France ».
We argued at the time that this requirement was of dubious legal validity as there had been no change in the primary legislation and that the Gîtes de France itself was a private body.
The Code général des impôts merely states that, amongst those properties benefiting from the higher allowance are ‘les locaux mis en location à titre de gîte rural’.
No definition of 'gîte rural' is given in the legisation, as it states on the government website: 'Aucune définition légale ne précise la notion de gîte rural'.
Despite the acendency the Gîtes de France has achieved since its creation in the 1950s, it is not a government agency; it is a privately owned guest house network to which owners can affiliate, subject to meeting the eligibility criteria and standards. Affiliation generally costs several hundred euros a year.
There are also other guest house networks in France, all of whom are likely to have protested at the decision to award the Gîtes de France such preferential status.
So it is perhaps no great surprise to find that the government has now abolished the Gîtes de France test.
They have done so in reply to a parliamentary question, which queried why other guest house networks did not qualify.
In response, the government declared that, in the light of the evolution of legislation, any 'meublé de tourisme', including rural gîtes, would now be entitled to the higher allowance of 71%. There is no requirement to be affiliated to any guest-house network.
In addition, owners would also be entitled to the higher maximum turnover permitted under the micro-entreprise tax regime of €82,200, instead of €32,900 under the standard regime.
These rules apply to both residents and non-residents alike.
We are aware from your mails that some local offices have never implemented the June 2013 instruction, as some of you have obtained the 71% cost allowance, despite not being affiliated to the Gîtes de France.
If you consider you have not been granted the correct allowance, and you would like professional support in making a claim for a tax refund, contact us at email@example.com.