It is a real fiscal thunderclap (though anticipated by many) that is striking owners of furnished rentals in France with the 2024 finance law. This law brings a significant fiscal adjustment to furnished tourist rentals, including villas, apartments, or chalets rented on a daily, weekly, or monthly basis. The objective is, of course, to address the shortages of properties available for long-term rental, which are often reserved for short-term rentals. The government had warned, and the matter follows a certain logic.
What changes can we expect from the 2024 finance law?
Starting from January 1, 2024, furnished tourist rentals (loueurs meublés de tourisme) now have a maximum turnover threshold of… 15,000 euros, compared to the previous 188,700 or 77,700 euros. As for tax deductions, they are reduced to 30% for these income categories, down from the previous 50% or 71% for classified furnished tourist rentals.
A brief summary table to help you see more clearly:
|Before 2024 Finance Law
|After 2024 Finance Law
|Maximum Turnover Threshold
|77,700 euros for furnished tourist rentals and 188,700 euros for classified furnished tourist rentals
|Tax Deduction in Micro-BIC
|50% for furnished tourist rentals and 71% for classified furnished tourist rentals
What are the consequences in terms of tax declarations?
Simply put, if your short-term furnished rental income exceeds 15,000 euros, you will be required to switch to the regime réel. This implies maintaining commercial accounts for your furnished rental activity, similar to any other business. You will need to submit a balance sheet and income statement to the tax authorities each year using Form 2031 and annexes before carrying forward the profit or loss to your personal income tax return.
For this, you will need some organization, as you must provide your accounting firm with all the necessary elements for your accounting:
- Bank statements in case of a dedicated bank account (ideal from an accounting standpoint!)
- Purchase invoices
- Notarized documents in case of real estate acquisition
Annual accounts must be filed by April 30 of the following year, so by April 30, 2024, for the year 2023, for example.
The transition from micro to regime réel
Once again, a change in regime, especially when it is imposed, can be intimidating, but don’t panic: the formalities are not so complex, and our team can handle them for you to make the process as simple as possible.
Two scenarios are possible:
Scenario 1: You already had a SIREN number
Simply request the switch to the actual regime from the relevant tax authorities – a signed letter provided to you will suffice.
Scenario 2: You did not have a SIREN number
In this case, you just need to apply for registration as a furnished rental provider to obtain one. Our team is, of course, willing to assist you in this process.
When do all these changes take effect?
The law now stipulates that the new regulations will come into effect on 01/01/2024. Consequently, income earned in 2023 will still be subject to taxation according to the previous tax laws. It’s important to note that if you intend to opt for the régime réel for your 2024 rental income, you must make the necessary changes.