FRANCE
What are Short -Term Rentals in France?
Short-term rental can be defined as a residential dwelling unit (either secondary or primary residence) that is rented to the same tenant for a period of 90 days. It is also referred to as "Airbnb," “Tourist accommodation’’ and “Furnished rental” in France. It is usually rented to tourists since France is a top destination country.
What is the maximum length of stay?
The type of residence utilized for the rental determines the maximum length of stay in France. A secondary residence has no maximum stay restrictions, however, a principal residence has a yearly limit of 120 days. However, in order to use their second house for short-term rentals, owners must file a declaration with their town hall and obtain permission. In cities like Paris, the host may also demand that the home's usage be changed from one of a business lease to one of a secondary short-term rental home.
Are there National Rules or Regulations Governing Short-Term Rentals in France?
The measure taken by the French government to regulate short-term rental nationally allows municipalities with more than 200,000 inhabitants to compel renters on digital platforms to declare themselves in town halls which helps the country face the housing crisis. As various municipalities now enact various rules to address the housing crisis. The rules are stricter from municipality to municipality.
If your secondary residential property is located in Paris, you are obligated to respect compensation rules; that is, for every 1 square meter of housing transformed into a short-term rental, you must acquire another 1 square meter of a commercial estate which must be transformed into habitation. This means that an investor that intends to carry out a short-term rental in Paris must buy two properties instead of one, while one is used for short-term rental, the other will be a commercial building that will be transformed for habitation to compensate for the housing shortage. Some boroughs are subject to strict compensation which requires compensation of 2 square meters of a commercial estate for 1 square meter of housing transformed into a short-term rental.
Non-compliance with this rule in Paris exposes the owner of the property to a fine of up to 50,000 euros per dwelling and a penalty payment of up to 1,000 euros per day per square meter until regularization.
Is there any National Tax that affects short-term rental?
Short-term rental owners in France are obligated to pay VAT, income tax, and social charges. There are different income tax regimes that you can fall under, depending on the classification of your furnished apartment by your local department of Tourism or the French national tourism development agency, the registration of short-term rental as a business, and other factors.
You’ll also need to pay either residential tax or property tax, depending on whether you are a tenant or owner. However, short-term rental carried out in primary residence is exempt from tax. You are also exempted from VAT if you don’t include additional services to your short-term rental.
The three different income tax regimes for furnished accommodation and small landlords are the micro-entreprise /BIC, micro fiscal, and regime réel but micro-entreprise and regime réel are the major tax regime.
- Micro-Entreprise/BIC: If your STR gross revenues does not exceed a predetermined level each year, you are qualified for this tax regime. Your tax burden is determined by deducting a predetermined percentage allowance from your annual turnover. Owners of certified short-term accommodations benefit from a higher fixed percentage cost allowance of 71%, with a turnover limit of €170,000, as opposed to unclassified (no stars) properties, which have a normal allowance of 50% of gross income and a maximum turnover of €70,000. Depending on the type of furnished housing you rent out, you pay taxes on either 50% or 29% of the gross rental income. In summary, income from furnished rentals is taxed under the Micro-BIC regulations, but as personal income tax.
- Micro-Fiscal: If your short term rental is registered as a microentrepreneur and your rental receipts total less than €23,000 per year, you are qualified for this tax regime. Depending on the kind of housing, you can choose to pay a fixed tax rate of either 1% or 1.7% of your gross revenue.
- Régime Réel: This type of tax regime is recommended for you as an owner of a STR if your actual costs exceed 50% or 71% (as appropriate) of your gross incomes because it permits the deductibility of some expenses like property insurance costs, local property taxes, the cost of a managing agent or guardian, the cost of maintenance or repairs to the property, interest costs from secured or unsecured loans used to purchase the property, etc.
Are there any Permits, Licenses, or Registrations for Short-term Rentals in France?
There is no national permit, license, or registration for short-term rental owners in France instead, you may be required to apply for permission with your landlord or at your municipality to rent out your accommodation for short-term leases.
Check your sub-national jurisdiction page on this website to access the latest information on the laws and regulations that applies to your short-term rental properties in France.
Is there any National Association for STR owners in France?
For further information, please contact;
Ministère de l'Économie, des Finances et de la Souveraineté industrielle et numérique
Télédoc 151
139, rue de Bercy
75572 Paris Cedex 12
Téléphone: 01 40 04 04 04
Department of Tourism
Ministry of Europe and Foreign Affairs
Email: https://www.diplomatie.gouv.fr/en/navigation/email-us/
Disclaimer
Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.
