Taxation Guide for Furnished Rental Income: Professional Landlord Regime and Exemptions

Extract

[...] Finally, as for the criterion related to the predominance of rental income over other revenues, this condition is assessed in light of the personal situation of each of the partners. The comparison between the income from furnished rentals and other household revenues shows that The income resulting from the furnished rental activity is lower than the other net income from activity of the household for the years and 2018. Year 2016 Year 2017 Year 2018 Nature of income M MARTIN MRS MARTIN M MARTIN MRS MARTIN M MARTIN MRS MARTIN Income art 79 CGI ? [...]

[...] The criteria to be met to qualify the furnished rental activity (professional or non-professional). 1-Compulsory registration with the RCS until 31/12/17 The family SARL is registered with the RCS for its furnished rental activity. Revenue level above ?23,000 (inclusive of VAT) The company has recorded in accordance with the principle of acquired claims codified at article 38,2 bis of the CGI, the following revenues: * ?22,060 HT - VAT: ?1,320, totaling ?23,380 TTC for the 2016 fiscal year; * ?30,983 HT - VAT: ?1,359, totaling ?32,348 TTC for the 2017 fiscal year; * ?45,970 HT - VAT: ?1,965, totaling ?47,935 TTC for the 2018 fiscal year. [...]

[...] This means that the result of an operation is taken into account as soon as this operation gives rise to a certain claim or debt, regardless of the date of the corresponding receipts or payments. This principle allows for the determination of the exercise of consolidation of the income and expenses of the company. In the case of taxation of rentals, taxpayers realize 'continuous services', which extend over several fiscal years and must be taken into account as they are executed. [...]

[...] Only the following are taxable: * the accommodation services provided in classified tourist hotels; * the accommodation services provided in classified or approved holiday villages; * the accommodation services provided in classified tourist residences when they are intended for the accommodation of tourists and are rented by a contract of a duration of at least nine years to one or more operators who have subscribed a commitment to tourist promotion abroad * the accommodation services in a furnished premises carried out at a charge provided that the landlord or his representative provide services in similar conditions to those of the hotel industry, that is to say that he must provide at least three of the following services: - furnishing of household linen - furnishing of breakfast - regular cleaning of the premises - unpersonalized reception of the premises This list is exhaustive. This means that all other forms of housing services are exempt from VAT without any option. As soon as the accommodation services are subject to VAT, furnished landlords can deduct the VAT that has been charged on the upstream purchases of goods and services, having a direct and immediate link with the taxable operations. [...]

[...] This form of society is used in the context of optimal asset management as it facilitates the transmission of assets and the demerger of shares. Its fiscal regime is also flexible. Its common law regime is the taxation of results at corporate tax rate, but an option to IR is possible. ? the SCI Article 206-2 of the CGI states that SCI are subject to corporate tax as soon as they engage in an exploitation or operations referred to in articles 34 and 35 of the CGI, that is to say a commercial, industrial, artisanal activity. [...]