Running a gîte in France: VAT, tourist tax and the SARL de famille

Furnished holiday lettings are exempt from VAT by default in France. Exempt means you charge no VAT to your guests, but you also cannot recover the VAT on your works, furniture and equipment.

A gîte becomes subject to VAT when it offers at least three of these four services, in conditions similar to a hotel: breakfast, regular cleaning of the accommodation, provision of bed linen, and reception of guests.

This choice has a direct impact on your budget: on a large fit-out, VAT recovery can represent a significant amount. It must be decided before the first orders are placed.

Gîtes collect a tourist tax from guests, per person and per night. The rate is set by the local authority and depends on the type and classification of the accommodation. You then pay it to the local authority. Booking platforms often collect it automatically for bookings made through them; direct bookings remain your responsibility.

A furnished holiday let must be declared to the town hall, and a registration number is required in a growing number of areas. Optional classification (star rating) can improve your visibility and change how the tourist tax is calculated.

You can run gîtes in your own name or through a company. A company separates your business from your personal assets, makes it easier to add other activities (a cookery school, workshops, events) and to welcome partners. The right choice depends on your budget, your expected income and your plans.

A SARL formed exclusively between family members (spouses, civil partners, parents and children, siblings) can opt to be taxed under personal income tax instead of corporate tax. Furnished letting qualifies. The profit is then taxed directly in the partners' hands. Whether this is better than corporate tax depends on your income, your fit-out costs and how you plan to use the profits: it must be decided before registration.

A common set-up: you own the property personally and lease it to your company, which runs the gîtes. This lease is a related-party agreement: it must be drafted carefully (we recommend a lawyer or notary) and approved each year by the partners.