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ADVICE – Baptiste Bochart, lawyer at the rental income declaration specialist jedeclaremonmeuble.com, describes in which cases you are liable, or not, for housing tax for accommodation that you rent out furnished.
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– If the property is used for short-term rental, you may potentially be required to pay housing tax.
“I am a furnished rental business: how will this work in terms of paying the housing tax?” This question is often asked in the context of a furnished rental business, particularly by those who have recently started their business. Since the housing tax must be paid this year by 21 December at the latest for online payments, it is best to know the answer to this question in advance to avoid any unpleasant surprises.
How does the housing tax work?
The housing tax is a tax collected for the benefit of local authorities, which, since January 1, 2023, has been abolished for all taxpayers for their main residence, but remains in force for secondary residences. Properties put up for rental are therefore affected by this tax. It is therefore not a tax whose amount is equivalent throughout the territory, and its calculation is done by taking into account several factors.
The first is the cadastral rental value of the property, in other words an amount equal to a full year’s rent if the accommodation were rented out. This rental value is, each year, revalued according to the variation in the consumer index, and is therefore largely dependent on inflation. The other variable will be the tax rate, voted by the local authorities, which will be applied to the cadastral value of the property, in order to obtain the amount owed by the owner of the property. Last element to take into account, if necessary: municipalities located in tense areas have the possibility of applying an increase in the housing tax on second homes.
I have a rental property, will I have to pay housing tax?
This will largely depend on the rental method of your property, but not only that. If the property is rented for the long term, in other words as the tenant’s main residence, you will not have to pay anything. The reason is simple: in the case of a long-term rental, the housing tax is due by the tenant who occupies the property on January 1st of the year. But in reality, the tenant will not pay it either. Why is that? Quite simply because the accommodation is the tenant’s main residence, and the housing tax does not apply to main residences. If by chance, the property is used for short-term rental activity, you could potentially be required to pay the housing tax. The criterion that will come into play here is that of the enjoyment of the property. From the moment you have the possibility of enjoying the property during the year, by staying there between two rentals for example, you will be liable for the housing tax.
As a result, the only way to avoid it is to use a rental management agency, with which you will be able to conclude an exclusive management mandate. This type of mandate will certify that you are not able to enjoy your accommodation yourself during the year, thus allowing you not to pay the housing tax. Finally, some municipalities located in rural revitalization zones may choose to exempt guest rooms and furnished tourist accommodation that have been classified from the housing tax. It is therefore advisable to inquire with the municipality and, if necessary, send a form to your public finance center to obtain the exemption.
I received a notice to pay housing tax even though I am in a situation where I should not be paying it, what can I do?
This could happen soon, as payment notices will reach taxpayers during the month of November. In this situation, simply contact your tax office as soon as possible, online or by mail, attaching, if necessary, a copy of the documents allowing you to obtain the exemption, such as a copy of the exclusive management mandate.
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