Should I apply for classification?

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limousin-cottage
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Should I apply for classification?

Post by limousin-cottage »

Hello everyone in sunny France! :D I have a tiny holiday rental cottage, which, even when added to my pension does not put me above the tax threshold for income tax, although I pay contributions sociale. My question is, would I benefit at all, tax-wise, from applying for classification? I realise being classified allows me to get the 71% abattement, meaning I only pay tax on the remaining 29%, but does this also apply to contributions sociale?? If it doesn’t, then there is no point in me applying for a classification and paying €150 for the visit, if you see what I mean? Thanks knowledgeable ones!
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Blanche
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Post by Blanche »

I wish someone would answer this question as I am in exactly the same position as limousin-cottage. Getting a classification would mean paying a lot more taxe de sèjour (which I can't be bothered collecting from the guests). I don't think the social contributions depend on how much tax you are liable for, but depends on your income. Does anybody know?

By the way I don't think you pay social charges on your pension from the UK. Anyway that's what I tell the tax people.
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oasiscouple
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Post by oasiscouple »

To be classified and have a 71% reduction for tax purposes, you only need to declare your cottage at your local mairie which costs nothing. You just fill in a simple form and once done you are classified. The taxe de sejour is just a minor irritation, here it is 0.75€ per person per night to be declared every 6 months (some communes once per year) and as there is little control it is up to you how many nights you declare (if you see what I mean).
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Post by Blanche »

I thought it was just the law that gites had to be registered at the mairie but classification was done by the chamber of commerce, tourist information or organisations like Gites de France. Inspected and given so many epis or clés according to the facilities.
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Post by oasiscouple »

Blanche wrote:I thought it was just the law that gites had to be registered at the mairie but classification was done by the chamber of commerce, tourist information or organisations like Gites de France. Inspected and given so many epis or clés according to the facilities.
No, we checked, and registering at the mairie = classification. We have done it for two properties, one a holiday rental and one a B&B. Job done.
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limousin-cottage
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Post by limousin-cottage »

Blanche wrote:I thought it was just the law that gites had to be registered at the mairie but classification was done by the chamber of commerce, tourist information or organisations like Gites de France. Inspected and given so many epis or clés according to the facilities.
This is my belief too. I went into our local tourist office, and was told the same. Is this another one of those things that can be different according to which dept you live in? :roll:
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Post by limousin-cottage »

oasiscouple wrote:To be classified and have a 71% reduction for tax purposes, you only need to declare your cottage at your local mairie which costs nothing. You just fill in a simple form and once done you are classified. The taxe de sejour is just a minor irritation, here it is 0.75€ per person per night to be declared every 6 months (some communes once per year) and as there is little control it is up to you how many nights you declare (if you see what I mean).
I am already registered at La Mairie, and there is no taxe de sejour collected in our area. What I basically need to know is if I don't earn sufficient to pay income tax, but I pay contributions sociales, does the 71% abbattement (allowance) still apply for the calculation of contributions sociales? In which case it is worth getting a classification. I am not sure, in fact I don't think, that being registered at La Mairie counts as classification. Do you have any links to point me to this info please? :)
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Post by limousin-cottage »

From the French-Property.com website

''New Classification

Since 1st January the Loi de Finances 2016 abolishes these concessions for rural gîtes per se, stipulating that only those that have accreditation as a meublé de tourisme classé will be entitled to continue to benefit from the tax concession.

In practice, since 2010 rural gîte owners have been required to make a declaration to their local mairie informing them that they are running a 'meublé de tourisme'. This description has been used in the absence of a statutory legal definition of a rural gîte.

It is to deal with this lacuna that prompted the change in the law.

However, the government have taken the opportunity to toughen up the rules by requiring those who seek the higher 71% allowance to formally seek a rating as a meublé de tourisme from one of the accreditation agencies. In other words, to become a meublé de tourisme classé.

We are aware that some local tax offices have previously insisted that only those gîtes with a rating could obtain the 71% allowance, but this has been local interpretation, not national law.''
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Post by oasiscouple »

My information came mostly from Service-Public.fr, for example regarding social charges on rental, yes if your annual income is more than 23000€, no if it it less. See https://www.service-public.fr/particuli ... its/F34102

Regarding the reduction of 71% on the amount declared for income tax, see https://www.service-public.fr/particuli ... its/F32744

It is not clear, even for French people, this question of official "classification" as the above links make no mention of this. There seem to be different rules for what is called a "gîte rural" but I haven't looked into this as my naturist beach apartment, declared (and therefore "classified") at Leucate Mairie, is definitely not a gîte rural. Neither was my Gironde home, which I used to rent out as a family holiday home, considered as a gîte rural. Now I run a small B&B from my home, again declared at my local village Mairie (and therefore "classified")

From all the information I have gathered, I can't see any need to complicate things by seeking official separate classification. When I filled in my declaration on line, I put my rental income in box 5NG on form 2042C PRO called "Location de chambres d'hôtes et meublés de tourisme classés". When I did so, a window popped up asking for the address of the place being declared, which I filled in and everything has gone through, even to the extent of advising me about the PAYE system to be implemented next year.

If anyone really considers their rental to be a "gîte rural", maybe the situation is different, but I certainly don't.
Last edited by oasiscouple on Wed May 16, 2018 8:14 pm, edited 1 time in total.
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Post by Blanche »

I assumed that with the tax forms being online the tax rules would be much the same in each department. As regards taxe de sèjour here the rate is 20cents pppn for non-classé to 80cents for 5* so if it were just a case of registering at the mairie you wouldn't have a star rating.

I keep reading this -
In the case where your house is not officially classified, you must fill in your revenues in 5ND (50%)
In the case where your house is officially classified, you must fill in your revenues in 5NG (71%).

I also read somewhere that if you were putting your income in 5NG and you weren't officially classified than you would be charged for the previous 5 years.
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Post by endurance »

Well i have just read for two hours every possible website concerning the abattement of 71% for meuble de tourism. To me it is very clear that declaration at the mairie does not make you a classified meuble de tourism. It makes you a declared meuble de tourism. You are only classified if you pay for a visit and have the stars. I think sooner or later the tax office will be asking to see proof and the certificat de classement and for any redressement yes they can go back 5 yrs and the fines are hefty.
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Post by Debby K »

I was in the unlucky situation of having an inspection by the tax office. 2 of my gites did not have the official classification "meublé" de tourisme" although all were declared at the mairie. The tax office went back 5 years and my accounts were adjusted accordingly. Luckily no fine because I was very willing to take my books in to show them. Be warned. Registering at the mairie is NOT the same as having a classification certificate to say your gites are classified "meublé de tourisme".
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Post by oasiscouple »

Blanche wrote:I also read somewhere that if you were putting your income in 5NG and you weren't officially classified than you would be charged for the previous 5 years.
I would be interested to know where you read this?

My understanding has been that 5ND is for year round lettings and not holiday lettings, but could this be wrong?

I see that when you look at on line information regarding classement, it states: "Le nouveau classement des meublés de tourisme est volontaire".

Also when I filled in my declaration at the Mairie, regarding my property, it stated : "classé ou non" and then on the form I send in to pay the Taxe de sejour, there are boxes to place a cross relating to classement and I cross the box which says "Sans classement".

From what I have read, the process of classement is related to establishing the standard of your rental, more for hôtels and camp sites and it is voluntary but if someone has found a solid link regarding the question of which box is required for the income, please post it. I have been declaring in the 71% box for well over 20 years with no query.

I might also add that in the area where I have my beach appartment (Norbonne Plage, Leucate, Port Leucate, Barcarès etc.) there are tens of thousands of holiday letting places. It would take an army of people if they all needed "classement" and I doubt if any of them bother, yet still get the 71% benefit.
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Post by oasiscouple »

Debby K wrote:I was in the unlucky situation of having an inspection by the tax office. 2 of my gites did not have the official classification "meublé" de tourisme" although all were declared at the mairie. The tax office went back 5 years and my accounts were adjusted accordingly. Luckily no fine because I was very willing to take my books in to show them. Be warned. Registering at the mairie is NOT the same as having a classification certificate to say your gites are classified "meublé de tourisme".
What do you mean "accounts were adjusted accordingly"? Did they consider the amount you declared should have been in the 50% abattement box and asked you to pay the difference based on 71% abattement over 5 years?
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Post by Debby K »

Yes exactly that!
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