Part Of Our Own Home Is A Gite, What Is This New Tax

Hi Tony

Do have any official info on this new Capital Gains Tax change on primary residences with gite accommodation or know someone I call about it so my accountant can get on the case. cheers Nick

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Hi Nick

All I have at present is feedback from forums, news items and some websites about the way mixed gite and residential properties will be treated for business and CGT - to get a clear and professional opinion I recommend you consult an expert in this field, I am copying someone who has give advice on similar matters and I attach his business terms (no such thing as a free lunch and free advice is the worst sort).

My understanding is that, in France, if a property, or a part of a property, is now let out in any way then the whole property will be treated as a "second home" for CGT purposes when it is sold. That is there is a CGT tax of 16%, reducing by 10% a year after the fifth full year (i.e. zero after 16 years). This is all very recent stuff.

My thoughts are that this is channeling rentals into a more controllable registration "business" model for taxation purposes - encouraging people to form a company SCI or SARL to manage the affairs and to make the income much more accountable.

Tony

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Dear Tony

One needs to be extremely careful about French tax matters generally where part or whole of the property has been let, either to tourists or to businessmen/farmers etc.

The practical problem usually is that for many years the French authorities may do nothing about it and then after a number of years (when it becomes economically worthwhile then pursuing a matter) they invite the client for a cozy cup of coffee which turns out to be less than a cozy encounter and there are tears before bed time!

Best regards

Stephen http://stephensmithfranceltd.com/