In more detail
As a reminder, taxpayers carrying out furnished rental activity could benefit from the "micro-BIC" regime, and deduct flat-rate allowances if their gross income did not exceed certain thresholds. Indeed, they benefited from a 50% allowance for standard furnished rentals and the rental of non-classified furnished tourism properties to the extent gross revenues do not exceed EUR 77,700. Moreover, a 71% allowance was applicable for classified furnished tourism rentals to the extent gross revenues do not exceed EUR 188,700.
In a context of housing crisis in France, the Government had decided to make less advantageous the tax treatment applicable to seasonal rentals. To this end, the Government's initial amendment simply aligned the tax treatment of classified furnished tourism accommodations with that of standard furnished accommodation, by reducing the allowance from 71% to 50% and the revenue threshold from EUR 188,700 to EUR 77,700. However, an additional 21% allowance was applicable, subject to certain conditions, for classified furnished tourism accommodations that were not located in "tight" housing zones, such as certain rural areas.
However, the government mistakenly maintained a senatorial amendment according to which the allowance for non-classified furnished tourism rentals would be reduced from 50% to 30%, and would only apply if revenue did not exceed the threshold of EUR 15,000 instead of EUR 77,700. The senators' aim was to align the tax treatment with the micro regime applicable to unfurnished rentals. After having read the final version of Article 50-0 of the French tax code, the rental of classified furnished tourism accommodations would however keep benefiting from the 71% allowance and the threshold of EUR 188,700. The senators by the way kept the additional 21% allowance to be applied, under conditions, to classified furnished tourism rentals which are in areas where there is no important imbalance between the offer and the demand of housing.
According to the press, the Government would have indicated that an instruction will be issued by the tax authorities to prevent the application of this senatorial amendment. Taxpayers renting out non-classified furnished tourism properties should therefore benefit from the previous rules (50% allowance to the extent income is below EUR 77,700) for revenues earned in 2023 to be declared in 2024. It is recommended to follow the publication of this instruction in the coming months. It's worth noting that two questions have been addressed to the Finance Minister on this topic in order to obtain clarifications.
Other amendments had been discussed as part of the Finance bill for 2024 and, in any case, the Government plans to launch a broad reform in the coming months concerning the taxation of furnished rentals. To be followed.
