We went through the first step which is to make sure the regulations in your town and building allows you to rent out your property.

If the town and building allows it then you go through the second step which is to register the property for Tourist tax and get a Tourist tax number if that applies in your commune.

The last step is that the owner register for a tax number.

If you don’t already make money in France you have to register for a tax number so you are able to declare and pay taxes on your proceeds.

Depending on your situation you can choose different tax strategies. Therefore we recommend talking to an accountant to look over your situation and choose the strategy that fits you best.

The two most common ways are LMNP and Regim reél. We go through both of them here so you have an idéa.

LMNP stands for loueurs en meublé non professionnels

This is what is called a simplified Bic. That means there is no real bookkeeping and the taxes are calculated after a schablon deduction of 50% has been deducted. The payable tax is then calculated on a progressive scale.

• Up to €11,294 | 0%

• €11,294 to €28,797 | 11%

• €28,797 to €82,341 | 30%

• €82,341 to €177,106 | 41%

• More than €177,106 | 45%

For non-residents, however, minimum tax rates apply:

• A minimum rate of 20% applies to the part of the taxable net income that is less than or equal to a certain limit (set at €27,478 for the taxation of 2022 income).Beyond this amount, a minimum rate of 30% applies.

• (ii) Obligation to Pay Social Security Contributions

• In addition to income tax, individuals non tax-residents in France are also obliged to pay social contributions on their income from property with French source: Generalized Social Contribution (CSG) at 9.2%, Contribution to the Repayment of Social Debt (CRDS) at 0.5%, and solidarity contribution (solidarity contribution) at 7.5%, i.e., a current total contribution of 17.2%. However, since January 1, 2019, individuals affiliated with another mandatory social security system other than the French one in an EEA country (European Union, Iceland, Norway, Liechtenstein), Switzerland, or the United Kingdom are exempt from CSG and CRDS. This income is still subject to a solidarity contribution of 7.5%.

Regim Reel

For this option more bookkeeping is required. Here you deduct your costs against gains and only pay tax on the money left over. The gains are then taxed at a 50% rate. This option can be an alternative if you have a lot of costs. Bear in mind though that it requires you to have a bookkeeper.

We trust that the information provided has shed light on the two prevalent strategies for property rental. Should you require assistance with the setup and declaration of your property, we have partnered with professionals who can guide you through the process. Feel free to contact us, and we will connect you with our trusted partners.

Having covered the essential first three steps in renting out your property, our upcoming articles will offer valuable tips to optimize the performance of your property. Stay tuned for expert insights on maximizing the potential of your rental investment