Tourism and Taxation: Opportunities for Home Owners

IN BRIEF

Tax reduction for classified tourist accommodations: reduced to 50%.
Rental income ceiling: limit of 77,700 euros to benefit from the reduction.
For a classified tourist accommodation, the reduction can reach 71% to 92%.
Reduction of the allowance to 30% for rentals through platforms like Airbnb.
New tax framework introduced for owners of rural cottages.
Rental income declared as Industrial and Commercial Profits.

Owners of tourist accommodations can benefit from a new tax relief that significantly modifies the allowances applicable to their rental income. This amended text in the Senate provides for a tax allowance of 50% for classified tourist accommodations, capped at 77,700 euros. Despite this revision, owners of cottages and guest rooms remain in a favorable situation compared to other types of rentals. This article explores these changes in detail and their impacts on the taxation of seasonal rentals.

An evolving tax framework #

The taxation of furnished tourist rentals has been a concern for many owners of cottages and properties intended for seasonal rental. Recent tax reforms, although aimed at restricting certain advantages, still offer significant benefits. For example, maintaining a tax allowance of 50% for classified furnished tourist accommodations enables many owners to continue enjoying significant advantages compared to the rental income of other types of properties.

Attractive tax allowances for classified tourist accommodations #

In the new regulations, owners who rent classified tourist accommodations can benefit from an allowance of up to 92% on their rental income, provided they meet certain conditions. However, this rate may be affected by the current tax arrangements. This perspective remains more advantageous compared to other categories of rentals, where the allowance is sometimes limited to 30% or 40% depending on the measures in force. It is essential for owners to understand the income thresholds in order to maximize their investment benefits.

Consequences of the reform for Airbnb and other platforms rentals #

Property owners currently active on platforms such as Airbnb must also prepare for this evolution. The reform provides for a reduction in the tax allowance granted to revenues from tourist accommodations, which could affect their profitability. Despite this, these owners still retain notable tax benefits compared to renting unfurnished properties, which face less favorable taxation and are often considered less attractive.

The challenges and opportunities for owners of tourist accommodations #

Although the new tax allowances are lower than in the past, they still represent a opportunity for owners to remain competitive. Indeed, for owners who receive annual rental income exceeding 15,000 euros, implementing a 50% allowance remains favorable compared to the more restrictive allowance rates prevailing in other segments of the real estate market. Owners must therefore be proactive in understanding and adapting to these changes to optimize their taxation.

The importance of correctly declaring rental income #

The declaration of rental income is essential to benefit from the available tax advantages. Owners are required to declare their income as Industrial and Commercial Profits (BIC), and not as property income. This distinction may seem technical, but it is crucial for the proper application of tax allowances. Owners who do not comply with these obligations may forfeit significant advantages.