Taxes and other deductions

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
Jamie
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Taxes and other deductions

Post by Jamie »

I have been looking through this forum, which is an excellent source of information, and wondered if someone could answer the following questions:
What would be the tax and social contributions (in terms of rate and amount) expected on gross rental income of say E23,000 for a family (husband+wife and three children) resident in France :?: Wealth tax isn't an issue, unfortunately.

Are any running costs available for set off against gross income or would these be taken care of under the microbic system :?:

An accountant will be one of our first ports of call if/when we move, but in the meantime any information is greatfully received
.
There have been several topics covering these issues previously but I have not come across one that covers all deductions in one place.

Jamie
aillis
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Post by aillis »

Hi

On an income of 23000€ there would be no income tax issue as you would have 5 points if you use the micro system you would have to make a contribution to social security at a guess it would be about 1800€ but at that level of income would get extra family allowance which would cover the social contributions
Jamie
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Post by Jamie »

"On an income of 23000€ there would be no income tax issue as you would have 5 points."

Aillis
What are the 5 points :?: Is this the number of people in the family :?

Jamie
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Ju
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Post by Ju »

Jamie

Can I suggest that you take a look at this thread: viewtopic.php?t=1594&postdays=0&postorder=asc&start=0

as there was quite alot of discussion on tax etc here.

In terms of points, I think you will be four points, one for each adult, half each for the first two children and one for the third child. You will definately not pay income tax at the level you are talking about.

Your social contributions should come out at about 21% of your GROSS income, this is for a micro bic, but doesn't really change much for the other regimes. (ie about 4800 €)

This will only cover you for the obligitory part of the health care. Top up insurance, to give you full cover will be about 1200€ per year.

You will also have tax fonciere and tax d'habitation to pay, which depends widely on the area but about 1000€ would be a good figure to use.

This all then leaves you 16000€ to run your business, and live off. Please think VERY carefully about this. The "poverty" level in France is 1500€ per month for a couple (this does not include rent or mortgage!). Running Gites is not free, your business costs would be anything from 2000€ upwards, and this would NOT include any capital items, like new boilers, new furniture, etc.

You will however recieve about 3240€ in family allowance.

Hope this helps in some way.

Ju
Last edited by Ju on Sun Apr 09, 2006 10:06 am, edited 1 time in total.
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Ju
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Post by Ju »

Further to my previous post, if an accountant is you first point of call, don't forget to include 800€ per year for him too!
Jamie
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Post by Jamie »

Ju,
Just wanted to say thanks for the figures and the link, both of which provided a sobering thought.

We will just have to think a bit smaller and take a bit more time with our project.
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