Although the taxation of furnished vacation rentals is less complex than it may seem at first glance, it is important to know.
It is essential to consider the specifics of the seasonal rental tax and see how it offsets your basic taxes. The goal as an owner is obviously to make your rentals profitable and optimize your cash flow.
Declaration of income from seasonal rental
As for classical rental, income and charges are also subject to taxation in the case of tourism rental activity.
Whether you propose seasonal rental accommodation for a few weeks a year or for the whole year, the rental income received is taxable.
Unlike an unfurnished rental which have to be declared in the category of property income, “revenus fonciers” in French, the furnished -seasonal or not- rental is to be declared in the category of industrial and commercial profits (BIC).
Depending on the amount of your annual income or your expenses, you must then choose between either:
- The “régime micro-BIC”, also called “régime forfaitaire”: this regime is very advantageous since it is relatively simple and allows you to benefit from a 71% reduction on the rents and collected charges.
- The “régime réel simplifié”: even though this regime is much more complex than the “micro-BIC” regime, it enables you to deduct property charges and amortization from your rental income. Nevertheless, you need to keep your accounts and also hire a chartered accountant. He will take care of your annual balance sheet. In order to be under the “regime réel simplifié”, all you have to do is to send a letter to the tax authorities stating that you wish to fall under this regime. This option must be executed before February 1st of the first year for which you wish to be under the “régime réel simplifié”.
This option is then valid for two years and is tacitly renewed for two years, unless termination (“dénonciation” in French).
|Régime micro-BIC ou régime forfaitaire||Régime simplifié|
|Classic rentals||Classified seasonal rentals (rural gîtes, furnished tourist accommodation, bed and breakfast)||Classic rentals|
|Conditions||Annual turnover excluding tax: < €72.600 /year||Annual turnover excluding tax: < €176.200/ year||– You are automatically attached to this scheme if your annual turnover excluding tax is between €72.600 and € 247.000 / year |
– You can deliberately choose this option if your deductible expenses exceed the lump sum deduction, i.e. more than half of your income.
|Advantages||50% reduction on rents and collected charges.||71% reduction on rents and collected charges||– Deduction of ‘charges réelles’: depreciation, financial expenses, works and charges related to the rental …|
– The possibility of not paying tax on rental income in the event of a deficit; i.e., when the charges are higher than the rental income.
|Fiscal declarations||N°2042 C PRO||N°2042 C PRO||N°2042 C Pro Declaration of BIC results n°2031 Liasse des tableaux annexes n°2033-A to 2033-G|
Tourist tax (taxe de séjour in French)
Some municipalities, which are classified as touristy, mountainious or seaside, or which carry out promotional actions to encourage tourism, may impose the payment of tourist tax, which is then collected from people passing through the municipality, that is to say who are not domiciled there and therefore do not pay their housing tax there.
Two calculation methods: fixed price calculation or real calculation
The municipality has the choice between two methods of calculation to determine the amount of tourist tax that holidaymakers will have to pay:
- ‘Calcul au forfait’: each year the owner informs the town hall of the capacity of his accommodation as well as the rental period. This information is used to determine the amount of the tax, which therefore no longer depends on the number of occupants.
- ‘Calcul au réel’: the amount of the tax depends on the length of the stay and the number of occupants in the accommodation.
The amount of taxe de séjour
It is set by the City Council and is based on the pricing scale defined by article L2333-30 of the General Code of Local Authorities. Indeed, the price may vary according to:
- The duration of the stay;
- The number of occupants;
- The comfort and nature of the accommodation.
The amount is between € 0.20 and € 4 per night per person (including a guest room).
Who pays tourist tax ?
It is the owners who must pay the tourist tax to the municipality, whether under regime ‘forfait’ or ‘réel’.
However, the platforms must be authorized by the owners to collect the tax and remit it to the municipalities.
What are the exemptions ?
When the tourist tax is calculated in real terms, some people may benefit from an exemption:
- Minors (under 18 years of age)
- People transferred in an emergency or on a temporary basis
- Employees of the municipality with a seasonal employment contract
- Occupants of premises managed by associations and who benefit from an advantageous rent (the threshold is set by the municipal council)
Whatever plan you choose, you will remain liable for social security contributions at the rate of 17.2%. If you generate more than € 23,000 in annual revenue, you will also be liable for social security contributions.
In short, if you are renting out a property, taxation should be carefully studied. Indeed, your rents will generate taxes and social security contributions. A significant burden that is not necessarily taken into account when you buy. In a classified furnished tourist rental property, you are subject to the BIC regime. You fall under the ‘régime forfaitaire’ if your income does not exceed € 176.200 per year. The pre-tax exemption is then 71% compared to 50% for a traditional rental. If your annual income exceeds this amount or if your deductible expenses exceed 71% of the deduction, you fall under the ‘regime réel’.