House sold for one euro
A 90-square-metre house in a town in the Cher department of central France has been sold to a family for €1.
The house was owned by the local mairie of Saint-Amand-Montrond and has been empty for six years. Its market value is around €27,000, but the mairie decided to put it up for sale at the symbolic price of €1 to try to attract new residents to the town.
The application process involved 68 bids from first-time buyers.
Saint-Amand-Montrond has a population of just under 10,000 people, but has lost around 400 people in the past five years.
The chosen family of four, originally from the French side of the Caribbean island Saint Martin in the Antilles, recently moved to the town of Muret in Haute-Garonne in the southwest of France. Their new property is around four-and-a-half hours north.
“We have always wanted to buy a property but our income is limited," the mother told Le Figaro.
“It's a quiet town, the climate is pleasant. This is what we wanted to raise our children.”
The property is currently uninhabitable and needs around €70,000 to €90,000 of renovations – a requirement stipulated as part of the conditions of the sale.
The family is obliged to live in the house for the next six years, and must start renovations within six months – to be completed over the next two years.
The new owners are also eligible to apply for €50,000 in financial aid, as long as they use local businesses and craftsmen to do up the property.
“We will first live in social housing until the work is finished. This reduced rent will allow us to save a bit more", the owners said.
Read more: Bargain homes: Eight properties for less than €50,000 in France
Building a garden greenhouse
A garden greenhouse is, under French law, often considered a building, depending on its size and this means you may need to apply for planning permission before erecting one.
You are free to install a greenhouse in your garden if its height is no more than 1.8 metres and its surface area is no more than five square metres.
Equally, if it is a temporary greenhouse, meaning it is standing for no more than three months in a year, you also do not need any planning permission, regardless of its surface area.
If a greenhouse exceeds either of these limits, then it is considered a building much like a swimming pool or garage.
In this case you will need to ask for an autorisation d'urbanisme which involves either getting a déclaration préalable de travaux (DP) from your local mairie, or a permis de construire (planning permission), form available online at this link.
The process you need depends on the greenhouse and where your house is located.
If your house is located in a protected zone (zone protégée), meaning in the vicinity of a heritage site or a historic monument, or on a classified site or a site awaiting classification, then the following rules apply:
If you do not live in a protected zone, then the following rules apply:
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You need to apply for a DP If your greenhouse is between six and 20 square metres in size and the height is less than 1.80 metres
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You need to apply for planning permission if the surface area is more than 20 square metres and/or the height is more than 1.8 metres
Read more: Must I pay France’s ‘garden shed’ tax on a replacement structure?
Mortgages refused on transport grounds
A new law came into effect at the beginning of this year that requires people taking out mortgages to not have a monthly debt ratio of more than 35%. This means their expenditure, including the monthly mortgage repayment and any other loans, cannot be more than 35% of their income.
However, a new report carried out by mortgage broker Vousfinancer found borrowers who have an indebtedness level of under 35% are still being refused loans because of the distance between their work and their prospective home.
“We have recorded refusals of mortgages because of the financial burden that this distance would represent in terms of fuel or even the purchase of a second car,” Sandrine Allonier, director of studies at Vousfinancer, said.
“From 30 kilometres upwards, this poses a problem for the banks.”
“And even if the borrower plans to travel by train, some banks are worried about the risk of strikes. These individuals have been refused even though their debt levels are sometimes low.”
This is the case of a couple of first-time buyers, earning a combined €3,000 per month who were interested in buying a house with a garden 35 kilometres from Lorient in Morbihan in Brittany.
Their mortgage application was refused despite a debt ratio of 32% because their cost of transport would work out at €560 per month, which was deemed too high for them to afford.
This refusal has also happened to borrowers on higher incomes. For example, a couple earning a combined €5,000 per month were unable to get a mortgage for a property in Alpes-Maritimes in the southeast of France. They ended up having to purchase a place in the neighbouring Var department.
This is despite the fact that their indebtedness level was 33% (within the 35% limit).
Declaring earnings on holiday lets / Airbnbs
It is tax season in France, with deadlines to declare 2021’s earnings coming up in May and early June.
You can read more about that in our article here: Six changes for household finances coming up in France in May
If you rent out a property on Airbnb or any other holiday let platform, you will have to declare your earnings, even if you only made €1. There are certain exceptions to this, such as if you host someone in your main residence and you earn less than €760 per year from this activity.
You can read more in depth about declaring taxes on holiday let earnings in our up-to-date income tax guide, which you can purchase at this link.
As a note, most holiday let platforms, such as Airbnb, send data about its hosts to the tax authorities every year. This includes users’ identity, number of bookings they have had, their income and certain information about the payment methods used. It means that you should be sure to declare your earnings correctly.
To the details….
Furnished tourist lets are typically declared as so-called micro-Bic income (though there is an option to declare under the réel system, keeping receipts for ‘real’ expenses and filling out an extra tax form, 2031, if you think it may be more beneficial). We will explain more about this further down.
Despite the fact that Bic stands for ‘industrial and commercial profits’ and this is also the category used for selling goods, this income is typically treated as simple investment income and is subject, if it is from letting in France, only to the ordinary social charges (CSG etc).
If you are renting out a tourist let, you will most likely fall under the category of being a loueur meublé non professionnel, meaning someone who is renting out a furnished property without it being their main profession.
Only if you fulfil two criteria are you also officially seen as engaging in ‘professional furnished letting’ as opposed to ‘nonprofessional’ (this affects the way income is declared):
You must be earning at least €23,000 per year from the activity and the income should be more than other taxable household income from pensions, purchased life annuities, salaries, other Bic income, agricultural income or income from ‘non-commercial’ self-employment.
Otherwise, you are considered to be a loueur meublé non professionnel.
To note, according to tax authorities anyone carrying out regular holiday letting (even if not ‘professional’) should still register in order to have a business Siret number, which in the case of some who does not rent out properties ‘professionally’ may be done free at the greffe (office) of the tribunal de commerce.
So, as long as you are considered to be ‘non-professionally’ letting out a property, there are two different ways to declare taxes.
The first, as mentioned, is through the system known as "micro-BIC" and is the simplest. You can declare through this system as long as your income from letting is not more than €72,600 per year.
Through this, you are entitled to an abatement of 50% for expenses (ie. the income is taxed after a 50% deduction). This can rise to 71% if the property is classified in the French star system, see more about that here (in French).
If you earn more than €72,600, you must use the réel system. This is more complex, but it allows you to optimise your tax situation by deducting a certain number of expenses. In this case, you must enter the amount of your income on the 2031-SD business return and deduct all your expenses on the same form.
If you do earn under €72,600 from tourist lets, you can also still use the réel system if you believe it to be more beneficial to you than the abatement of 50% offered under the micro-BIC system.
Read more: How do we declare letting income on our French second home?
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