The regulation on short-term furnished rentals (“Airbnb”) is getting tougher in Bordeaux, forcing owners who are like professional hotel hosts to:
pay social security contributions for income from their short-term furnished rentals > 23K euros/year
request permission from the town hall to practice in furnished tourism
request the change of use with compensation
In this context, in view of the increasing demand for furnished housing (students, professional mobility), long-term furnished rentals can be a real opportunity, in order to guarantee regular, year-round income for landlords, to alleviate logistical constraints due to changes in tenants (conditions of the premises, renovation etc.), or to allow landlords to pay a minimum of tax by deducting expenses and depreciations. However, it is still necessary to master the framework.
Recall on the current and future legal framework
To date, in 2017, all income from furnished rentals in 2017 is to be reported in BIC (Industrial and Commercial Profits). Next year, the legal framework will be slightly different depending on the situation: if the main residence is rented, in full or partially, within the limit of 120 days per year, you will need to file a furnished online tourism declaration and you will immediately get a registration number that will have to be carried over to your rental listings as of March 1, 2018.
If you rent a short-term furnished dwelling that does not constitute your primary residence, you will need to obtain a change of use authorization with compensation (in according with articles L631-7 and following the building and housing code and Article 3 of the municipal bylaw relating to the change of use) and then you will have to change the destination of the premises to hotel accommodation , and finally, register online in order to get the registration number that will be published on rental ads from March 1, 2018.
In addition, if your annual revenues in 2017 are less than 23K euros; the income from this activity is the responsibility of the management of private assets and does not give rise to the payment of social contributions. However, you will be asked to report your income or income to the tax authorities on your tax return.
If, on the other hand, your annual revenues in 2017 are more than 23K euros, the income from this activity is professional in the eyes of the RSI.
In a nutshell
Threshold making membership mandatory
$82.8K and more
To find out more
In 2019,online platforms such as Airbnb, Abritel etc. will be required to report to the Tax Office the total amount of revenue collected from their customers/owners.
Why don’t you take the right tax option?
When you own a property, two types of rental are possible:
– Naked rental, subject to the category of property income
– Furnished rental, subject to the industrial and commercial profit category (BIC)
In both cases, the rents collected are taxable and the current expenses are deductible (micro or real). Thanks to the furnished rental, with real option, you can deduct depreciation. It is for this reason that the status of furnished renter is currently the most popular with landlords. By choosing this tax system to the real they deduct expenses and practice depreciation: a device that greatly reduces the taxable base and therefore taxes!
Indeed, the real simplified BIC scheme allows the deduction of all expenses related to the operation of the property: maintenance and repair bills, property taxes, insurance costs, management fees, accountant’s fees, subscriptions and various consumption (telephone, internet, etc.), borrowing interest… limitless!
This plan also allows the following depreciation and amortization to be deducted: amortization of the property, depreciation of furniture and depreciation of works… The simplified real regime in return involves accounting, administrative, declaratory and tax obligations, which can be fully carried out by specialized companies such as LOKIZI.
In a city like Bordeaux that is facing rising real estate prices for purchase and rent, the solution of studios and furnished apartments is a boon for tenants who wish to settle in the capital of Girona. At a time when 10.75% of Bordeaux rentals are furnished, relative competitors for short-term rentals (AirBnb, Homestay) are subject to new regulations in order to favour longer-term rentals, where tenants become permanent residents.
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