You own a rental property or several rental properties. Have you bought and sold your property in the last year? In France, rental income and capital gains are subject to income tax. April and the opening of the tax period is coming soon! We can help you prepare your rental and property income tax return with our advice on how to declare your rental investments to the tax authorities, the forms and the boxes to be filled in when declaring your income in France.
HOW TO DECLARE YOUR PROPERTY INCOME FROM YOUR RENTAL INVESTMENTS?
In France, you must declare all your sources of income. This includes the rent you receive from your rented properties (bare or furnished); this is called income from property!
You have to fill in this information on your 2042 tax return, which arrives in April. You must provide information about your property (address, type of property, amount of rent received, deductible expenses, etc.).
On the return, you will fill in box 4BE of form 2042. Depending on the tax regime (real or micro-foncier) or the amount received, this may change and you may have to complete form 2044. In France, there are in fact two tax regimes:
- the micro-foncier regime, automatically attributed when gross rental income is less than €15,000 (including charges). A flat-rate allowance of 30% is automatically applied. Indicate the property income in box 4BE of the declaration N°2042.
- the actual system, which allows you to deduct more expenses (work, maintenance, etc.). Depending on your situation, you must complete a special property tax return (n°2044 or n°2044).
If you can choose, compare the two systems and study the advantages. Important to know: if you opt for the real estate regime, you are leaving for 3 years.
If you have property income outside mainland France and the French overseas departments, you must fill in form 2047 and attach it to your tax return.
Benefit from a tax reduction via the 2042-RICI & 2044-EB forms
- - form 2042 RICI : declare the expenses that entitle you to a tax reduction or credit.
- - form 2044-EB : (private lessor status - commitment to rent) tick the tax reduction scheme requested (Pinel, Denormandie...)
Deduct your expenses too 🥳
The good news is that you can also deduct certain expenses from your property income, such as management fees, loan interest, renovation or maintenance work, etc. This is why it is essential to keep all the invoices and proof of expenditure so that you can deduct them from your property income. You must indicate the amount of these deductible expenses in VAT included. If your rents are subject to VAT, the amount of the expenses must be indicated in exclusive of VAT.
🚨 Do you own several built properties, some of which are rented out? In 2023 and following the abolition of the taxe d'habitation, you must make an additional declaration in your personal space on impots.gouv.fr (Individuals > Property tab) and provide information on the use of the properties. You have until 30 June 2023 inclusive to make the declaration. The obligation concerns individuals, undivided owners and non-trading property companies (SCI). The latter must make their declaration on their professional space.
HOW TO DECLARE A PINEL INVESTMENT?
To declare your Pinel investment, you must fill in the 2042-C form, which is an annex to the classic tax return. You must indicate the information relating to your investment (address of the property, amount of the investment, duration of the rental commitment, etc.). You must also indicate the amount of the tax reduction to which you are entitled.
HOW TO DECLARE CAPITAL GAINS ON REAL ESTATE TO THE TAX AUTHORITIES?
Have you sold a property in France for more than the purchase price? The capital gain must be declared to the tax authorities. To do this, a notary must complete form 2048-IMM (Declaration 2022 de plus-value - Cessions d'immeubles ou de droits immobiliers - Form 12359).
HOW TO DECLARE THE INCOME OF A SCPI?
If you receive income because you have invested in an SCPI (société civile de placement immobilier), you must also declare it. The company that manages the SCPI sends you a single tax form (IFU) that summarises the amounts to be declared. Depending on the tax regime chosen (real or micro-foncier), the amount of SCPI income must be reported in the corresponding boxes on the form: 2042 box 4BE (micro-foncier) or 2042 4BA and 2044 (real regime).
Please note: depending on the case, the income must be entered gross or net.
NEED A HAND WITH YOUR TAX RETURN IN 2023?
If you are having difficulties, there are several solutions that can save you from an ulcer and the spontaneous combustion of some neurons 😱 :
- call your tax department using the number 0 809 401 401
- send a message via your professional messaging system
- make an appointment with an agent (at the counter, by video or by phone)
- contact an accountant
- use your joker: call a friend
In 2022, the Allô impôt operation was launched in France. It remains to be seen whether the scheme will be repeated in 2023!