I have recently moved to Dubai with work, which unfortunately means we won't be able to get to our house in France very often, so we've decided to rent it out for holiday lets.
Can anybody tell me how much tax we will have to pay on the rental income we receive, and whether we can off-set things like repairs and management costs?
We will obviously not be residents of France, and have cut our ties in the UK so we won't be EU residents at all.
Most grateful for any information on this.
tax on gite rental income
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iracathey
- Posts: 21
- Joined: Wed Mar 01, 2006 2:11 pm
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Taxes and Such
Hi,
I can't speak to anything other than my own experience but I'll be happy to share.
We purchased our rental property in France without setting up an SCI - a corporate entity that provides protection against inheritance laws. Our accountant told us that we have two options. We could register as a 'micro-enterprise' and pay a flat tax rate - 12.5% - on our rental income. Or we could set up as a business and be able to deduct expenses from income as allowed by French law.
We chose the former and we'll just use the French tax as a deduction on our American returns. But I strongly urge you to find a professional who can give you advice specific to your situation. Information on these forums is notorious for being contradictory and self-serving.
Good Luck.
I can't speak to anything other than my own experience but I'll be happy to share.
We purchased our rental property in France without setting up an SCI - a corporate entity that provides protection against inheritance laws. Our accountant told us that we have two options. We could register as a 'micro-enterprise' and pay a flat tax rate - 12.5% - on our rental income. Or we could set up as a business and be able to deduct expenses from income as allowed by French law.
We chose the former and we'll just use the French tax as a deduction on our American returns. But I strongly urge you to find a professional who can give you advice specific to your situation. Information on these forums is notorious for being contradictory and self-serving.
Good Luck.
If it is just one property, and you are not resident then there is no need to set up a company. You can declare rental income on the French tax return (which you will have to complete). I can't remember which section it is but I'm sure someone out there knows. I'm pretty sure that if you do it this way it is the profits you declare, ie after management fees etc.
Remember it is not just tax, you will also have to pay a portion of social charges (I think this is about 11% if you are non resident, but don't quote me on that).
If you get a management company in (which I'm guessing you will if you are in Dubai) then they may be able to sort that out for you.
Ju
Remember it is not just tax, you will also have to pay a portion of social charges (I think this is about 11% if you are non resident, but don't quote me on that).
If you get a management company in (which I'm guessing you will if you are in Dubai) then they may be able to sort that out for you.
Ju