There has been a lot of talk over the past year about the tax regime for furnished lettings, especially in the tourism sector, sometimes referred to as the AirBnB niche. In the end, an amendment crept into the 2024 Finance Law "by mistake", according to the government. Article 50-0 of the General Tax Code, published in the Journal Officiel on 30 December 2023 and in force since 31 December 2023, amends the micro-BIC scheme.

A look back at the micro-BIC scheme before this reform

If the property you rent out meets a number of conditions - if you can live there simply by bringing your travel bag, as it were - then you are taxed on your income under the BIC scheme (Bénéfices Industriels et Commerciaux). Until 2023, the limit was €77,700 (€72,600 in 2022) for a 'simple' rental and €188,700 (€176,200 in 2022) for hotels, bed and breakfasts, gites ruraux and furnished tourist accommodation, to qualify for the micro-BIC scheme. In the first case, the allowance applied to income was 50%, while for the second type of service, the allowance was 71%. This is where some people referred to the Airbnb niche.

The impact of the 2024 Finance Act

The thresholds for the micro-BIC scheme mentioned in the previous paragraph have been lowered to €15,000 for the rental of furnished tourist accommodation provided for in Article L.324-1-1 of the Tourism Code. This applies to furnished accommodation in villas, flats or studio flats where the stay is for a day, a week or a month.

The flat-rate allowance is increased to 30% for unclassified furnished accommodation, to bring it into line with the micro-foncier scheme for bare property rental.

Classified furnished tourist accommodation remains subject to the micro-BIC scheme, with an allowance of 71% as long as turnover is less than €188,700.

In the latter case, an additional allowance of 21% applies if the accommodation is located in a non-tensioned zone and turnover is less than €15,000. The overall allowance would therefore rise to 92%!

The schemes for traditional furnished lettings, as well as those for parahotels and chambres d'hôtes, remain unchanged. The thresholds for eligibility for the micro-BIC scheme are €77,700 and €188,700, with 50% and 71% tax relief respectively.

Above these thresholds, the owner is subject to the actual tax regime. Under this tax regime, the expenses incurred by the property during the year can be deducted, as well as any potential depreciation of the property. No deficit can be generated, but income can be written off in full.

In the end, the law as passed does not correspond to the 'spirit' of the text, which was aimed at short-term lets. In fact, the taxation of furnished accommodation has become more complex, and amendments are likely to be considered over the course of the year. It is therefore essential to have the expertise of a specialist. The Wealth A7 team can help - contact us!

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