Tax advantages for gîtes are downgraded
Gites have been downgraded for certain tax advantages which, by the letter of the law, will not apply to them next year.
The advantages can, however, be retained if the gîtes are ‘classified’ under the star system as meublés de tourisme (furnished tourist lets).
The changes are due to modifications to the Code Général des Impôts and the Code du Tourisme and have an impact on income tax, local property taxes and cotisation foncières des entreprises (CFE) tax. They relate to:
1: The rights of people to declare income from gîtes under the micro-BIC system. Until now there has been a distinction between ordinary furnished letting and income from gîtes, chambres d’hôtes and meublés de tourisme. Ordinary lettings qualify for the simple micro-BIC tax system if they have turnover of no more than €32,900 a year and are entitled to a 50% expenses abatement. The other category has a ceiling of €82,200 and a 71% abatement, to account for the activities’ seasonal nature. According to the letter of the law (although reportedly some tax offices have given some leeway), to qualify for the higher levels, gîtes were meant to be labelled by Gîtes de France and meublés de tourisme were meant to be ‘classified’. Now the law says gîte income will not come under tourist letting (declared at boxes 5NG and 5OG on form 2042C-PRO) but under ordinary furnished letting (boxes 5ND and 5OD), meaning more of the income would be taxed, unless the gîte is ‘classified.’
2: Non-classified gîtes have been removed from the right to exemption from taxe d’habitation and taxe foncière which exists in ZRRs (designated areas, often agricultural, which have suffered from rural exodus) where mairies have voted for the exemption. Although the right has technically already been removed, it has been maintained for this year’s local taxes but will, if strictly applied, not be allowed for gîtes next year. To qualify for the exemption, you must apply to your tax office by the end of the year before. We cover this topic in our 2016-2017 Local Tax helpguide, available from the helpguide section of connexionfrance.com
3: Exemptions from CFE tax in the case of regular short-term tourist letting of part or all of a main or second home. This was previously granted, unless mairies voted to remove one or more of the categories, for classified meublés de tourisme, gîtes, or other properties. Gîtes have been removed as a separate category, so can now only benefit if they are classified or if mairies approve the gener- alised heading.
Classification involves a visit by an accredited inspection body. See: www.classement. atout-france.fr/meubles
