The French government has launched further measures to regulate furnished rentals. More and more landlords are using the services of private rental websites for short-term rentals and the French authorities want to control this rapid development.
Since 1st January 2017, landlords must pay the contributions to the RSI (Social Regime of Independents) on their rental income as soon as the annual turnover is beyond 23,000€. If landlords offer short term accommodation or if one of the household members already has a furnished rental/s, this must also be registered as a ‘professional’ activity.
Under the amount of 23,000€, the annual rental amount is liable to social contributions (15.5%) since 1st January 2016, but the Social Security Financing Act for 2017 allows, in certain cases, to derogate from the RSI new obligation by opting for affiliation to the general social security scheme if the annual gross rental income does not exceed 82,800€. But before choosing this scheme, it is important to check the advantages and disadvantages of declaring under the most tax efficient regime.
To avoid landlords ‘forgetting’ to declare their rental income via platforms such as Airbnb, persons concerned will have to report to the French tax authorities all revenues realised by their clients from 1st January 2019, as well as the name of the owner and personal details of the owner.
In some locations, such as Paris (cities of more than 200,000 inhabitants or towns of more than 50,000 inhabitants) landlords will also have to make a declaration in the local mairie.
Generally speaking, from 1st January 2017, all revenues from furnished rentals will be subjected to the BIC tax regime (industrial and commercial profits).
In the future, controls by the French tax authorities will be strengthened and it is important to ensure you are up-to-date if you rent your house or apartment legally and wish to avoid penalties.
Chartered Accountant, Commissaire aux Comptes