A significant fiscal overhaul, long-anticipated by many, is reshaping the landscape for owners of furnished rentals in France with the introduction of the 2024 finance law. This legislation brings about considerable changes in the tax structure for furnished tourist rentals, encompassing villas, apartments, or chalets leased on a daily, weekly, or monthly basis. The primary goal is to address the scarcity of properties available for long-term rentals, often reserved for short-term stays. The government’s prior warnings indicate a logical progression in this matter.
Anticipated Adjustments in the 2024 Finance Law
Commencing January 1, 2024 (or 2023 – awaiting government clarification), furnished tourist rentals (loueurs meublés de tourisme) now face a capped turnover limit of €15,000, a substantial reduction from the previous thresholds of €188,700 or €77,700. Correspondingly, tax deductions have been revised to 30% for these income categories, down from the prior 50% or 71% applicable to classified furnished tourist rentals.
A succinct comparative table for clarity:
| 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 | 15,000 euros |
| Tax Deduction in Micro-BIC | 50% for furnished tourist rentals and 71% for classified furnished tourist rentals | 30% |
The Implications for Tax Declarations
In essence, if your short-term furnished rental income surpasses €15,000, a transition to the regime réel becomes mandatory. This involves maintaining commercial accounts for your furnished rental activity, akin to any other business. Submission of an annual balance sheet and income statement to the tax authorities, using Form 2031 and annexes, is necessary before incorporating the profit or loss into your personal income tax return.
Organizational requisites include providing your accounting firm with essential elements such as:
- Bank statements (particularly if you have a dedicated bank account, a preferred option from an accounting perspective)
- Purchase invoices
- Notarized documents for real estate acquisitions
Annual accounts must be filed by April 30 of the subsequent year, for instance, by April 30, 2024, for the year 2023.
Transition from Micro to Regime Réel
While a change in regime, especially if imposed, may seem daunting, there’s no need to panic. The formalities are not overly complex, and our team is equipped to simplify the process for you.
Two Scenarios Unfold:
Scenario 1: If you already possess a SIREN number, simply request the transition to the actual regime from the relevant tax authorities, backed by a signed letter provided to you.
Scenario 2: If you lack a SIREN number, applying for registration as a furnished rental provider is straightforward. Our team is ready to assist you through this process.
When do these Changes Take Effect?
The critical question for January 2024 remains unanswered: will these changes impact 2023 income or commence from 2024? Clarity on this matter is expected from the government in the upcoming weeks…
The author: Géraud is the co-founder of The French Tax Representative and a chartered accountant by training, specialising in real estate and international clients since 2017. He and his team help several hundred individuals and companies each year with their French tax management.