Opening a gite business in France

Monday, June 01, 2009

Opening a gite business in France

Over recent years, it seems that more and more English people are searching for their dream of turning a rural chateau into a 'chambre d'hote' or 'gîte' in France. With a more temperate climate, healthier lifestyle, away from the hustle and bustle of urban living and a lower tax rate, it's easy to understand why. If you too are lured by 'la belle vie' in France then here's some information on what you can expect when preparing to open a gîte.

By opening a gîte in France, you are able to take advantage of a lower rate of income tax on your earnings than if you were to open a hotel or commercial business. A gîte is classified under French law as an establishment of no more than five bedrooms offering board, breakfast and linen to no more than 15 people. If your business earns less than €81,500 a year you will be eligible for what is known as 'MICRO BIC' (benefice industrielle et commerciale), by doing this you actually only pay income tax on 29% of your total rental income. If that doesn't make you love France, I don't know what will.

Of course you will still need to pay council tax, know in France as 'Tax D'Habitation' which will depend on the size of property and area of France you are in but typically however, this is less than in England at around €750 - €1200 a year and 'Tax Fonciere' at an additional €500 - €1300 a year.

It is worth bearing in mind however, that if you are planning on converting a building that is not currently being used as a gîte, you will need to register this with the local 'Mairie' or Mayor. This won't cost you anything and they have no legal right to refuse your proposal as long as you meet the EU health and safety requirements. If you don't do this however, they can prevent you from advertising locally or displaying any signage. In France It is believed that over 50% of all gîtes are not formally registered with the local mayor and recent legislation is trying to reduce this number in order to offer more consumer protection but also in response to complaints by the hotel industry regarding the formally ambiguous guidelines for running businesses of this type.

Of course when thinking about opening a gîte or any business abroad it is imperative that you seek good legal advice before embarking on any plans. It's also well worth your while to speak to the local mayor who will be much more welcoming than you might expect.

Read our guide to buying a property in France and search from thousands of properties for sale in France.

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