Are you thinking about letting out your property in France? Before throwing open the doors of your dream property, here is a handy checklist to assist you as you stumble through the quagmire of rules and regulations set out by the French government.If you haven’t already bought your ideal property, the best areas to check are currently Brittany, Chamonix, Morzine, Portes du Soleil and Paris. The location of your potential property let is crucial, so we suggest you research the area and your competition. Find your niche; what makes your accommodation stand out from the rest?
Some cities in France have a mandatory registration and teleservice process, so if you rent out a primary or secondary home, you need to know if the city where the property is located has implemented such a procedure. To get your registration number, log into the Homeaway teleservice, enter the information you are asked for and you will immediately receive your number.
France welcomes migrants from all over the world to buy and sell property without restrictions, although uncertainties surrounding Brexit bring some worrying times. However, experts suggest that British buyers will still be able to buy a property in France after the UK’s withdrawal from the EU, although there may be a lot more hoops to jump through than at present.
Letting property in France can be a great way of making a second income. However, you may find you are liable for a variety of taxes. Non-residents of France pay tax on any rental income at a flat rate of 20 per cent irrespective of any double taxation made in the country where the income is received. Property tax charges depend on the size and condition of the property, as well as rates set by the local communes.
You will also need to arrange property insurance, while landlords of unfurnished properties can take out ‘unoccupied insurance’, which costs less than a typical household policy. However, for furnished property, you must add the value of the fixtures and furnishings. Don’t forget to add a non-payment of rent premium to your insurance cover.
The primary obligation of a landlord is to rent “decent” housing, which is defined as a property in a good state of repair which meets all the health and safety requirements of the tenant. Property surveys confirming this should be carried out and attached to the tenancy agreement. A tenant may not withhold their rent if a landlord is negligent in carrying out essential repairs but may make a legal claim through the magistrates’ court.
The tenant’s primary obligations include paying the service charges and rent on time and insuring the home. The tenant is required to pay the taxe d’habitation (inhabitancy tax) bill which arrives by mail, usually in October. Other obligations may also apply.
Landlords are categorised as professional or non-professional. Those who are registered as non-professional leasers of furnished property can benefit from an exemption from income tax when they rent out their primary home, which is not the case for professional leaser of furnished property.
Tax regimes apply equally, whether the landlord is a professional or non-professional. However, there are differences in taxes for furnished and unfurnished lets. It is best to consult a tax advisor with regards to which tax regime is the most suitable for your situation.
An estate agent or huissier de justice can also provide support. Huissiers are public officials who can provide a service to landlords and renters in matters of tenancy agreements and disputes. They are restricted to working within a specific location; details of your local huissier can be found in the yellow pages. Without strong evidence to the contrary, their word cannot be contested at a court hearing.
A record of each tenant’s stay should be kept for financial purposes. Use the skills of your local huissier to construct a legally binding tenancy agreement that’s personal to your property. A lease agreement or tenancy contract (bail) must stipulate terms and conditions of the rental and be signed by the landlord or estate agent and the tenant.
A short term lease must not exceed 90 days for secondary and principal residence, while a holiday home can be let for the whole vacation period and family homes can be let for between three to six years with first refusal to buy or re-rent when the tenancy is up for renewal, depending on whether it is furnished or not. A principal residence is the dwelling in which you reside most of the time when you are in France. This property cannot be leased for more than 120 days per year, but second homes may be rented without any such limitation.
Since January 1st, 2019, regulations about rental prices and sizes have been implemented. Ceilings must be at least 2020mm from the floor, and there should be at least nine square metres of habitable space. There must be a separate shower/bath and toilet, a window is required in the main living and cooking areas while there must be some form of heating for winter lets. Maximum rent charges have been set at €187 per meter squared per year in the Ile-de-France area and €138 per meter squared per year elsewhere. A returnable deposit of 25 per cent of the rent is required.
Take care when selecting a tenant. Do not take information provided at face value and follow up all claims made by a prospective tenant. Ask to see several related pieces of evidence (not photocopies), so you can ensure the validity and accuracy of the information such as salary slips or an income tax return.
French people seeking somewhere to rent on a long-term basis tend to consult local newspapers and magazines, while those interested in relocating from abroad are more likely to use the internet and national publications to find their new home. An estate agent may be able to help attract tenants, but do not give the agent exclusivity or you may have to pay them a fee if you find someone elsewhere.
Now you are ready to dip your toes into the sea of your landlord lifestyle but remember, rules and regulations are always changing, so make sure you are always aware of any changes that could affect you and your business.
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