Airbnb owners finally escape the tax truncheon in France

All Airbnb rental owners in France can breathe easy, as the government abandons its draconian tax plans in favor of a more lenient approach.

This is good news for Airbnb, Booking, Abritel and other hosts, who were under pressure. The government abandoned last Wednesday the initial draft finance law for 2024, which would have tightened tax constraints on owners of furnished tourist rentals. By using article 49-3 of the Constitution, the government automatically rejected an amendment which wanted to impose a lower tax deduction on tourist rentals and year-round rentals.

Two amendments that did not play into the hands of Airbnb, Abritel and Booking

We can say that the government surprised everyone. Two amendments were intended to restrict advantages, with the introduction of a 40% reduction (on income) for unclassified rentals (Airbnb in particular), and the appearance of a new tax on capital gains resale. Today, furnished tourist accommodation (Airbnb) benefits from a 71% reduction. Year-round rentals only benefit from a 20% reduction.

The Minister Delegate in charge of Public Accounts, Thomas Cazenave, justified this abandonment by citing the lack of possible agreement on an alternative budget. The oppositions had refused to vote in favor of the budget, forcing the use of 49-3 to advance the government counter-proposal.

Airbnb owners can take a breather

In place of the abandoned measures, the government is now proposing a tax reduction of 50% (compared to 71% currently) for owners of classified tourist rentals (bed and breakfasts or gîtes) only, but subject to income conditions.

The eligible income limit for this reduction has been reduced to 77,700 euros, compared to 188,700 euros previously. As for owners of unclassified tourist accommodation, such as Airbnb, Abritel, Booking and others, they are simply and ultimately not affected, and will retain the reduction at the current, more favorable rate.
This is interesting, when we know how much it brings in for the “hosts” who rent their accommodation.

The government’s decision to relax its tax plans for Airbnb rentals aims to maintain a balance between encouraging tourism on the one hand, and protecting local residents on the other. However, are we moving towards stability and a more nuanced understanding of the issues linked to the rental of tourist accommodation in France? Nothing is less sure. Cities victims of the housing crisis are easily railing against the government’s decision.

Source : Capital