Has France’s reform of tax on holiday rental properties changed?
Confusion reigned last year over changes included ‘by mistake’ in finance bill
Rules on how gite owners would be taxed were unexpectedly changed last year
sylv1rob1 / Shutterstock
Reader Question: Are there any updates about the changes in taxation rules for gîte owners? I remember lots of articles about it last year
A parliamentary bill last year caused widespread confusion, when it signalled a change to taxation rules for those who let gîtes and other short-term holiday rentals.
An overview of the rules, which affect those letting properties using the micro-bic system and could greatly reduce the allowance for expenses, can be found in our article below.
Some media reports claimed the changes were included ‘by mistake’ as part of an unchanged Senate amendment to a finance bill, related to tightening tax regulations on short-term lets such as Airbnbs.
Read more: Many gite owners in France forced into complex and costly tax regime
Earlier this year, France’s tax authorities announced that the rules would not apply to 2023 income, and thus would not affect tax income declarations in the spring of 2024.
More recently you may have seen French media reports stating that France’s top administrative court, the Conseil d’état, had called into question the validity of the tax service bulletin.
However, it appears that this objection was a technicality, and that those who declared their 2023 income on time this spring can indeed still benefit from the previous taxation rules, with the changes not being deemed to apply retrospectively to income from that year.
Changes still in place for 2025 declarations
Despite the fact that the rule changes have been discounted for those who declared 2023 income in spring 2024, the changes have not been completely removed.
Income from holiday rentals in 2024, which will be declared in spring 2025, will therefore, barring any further changes, see the new tougher restrictions applied.
An additional complication which potentially saw tax on holiday rentals set to change yet again - to a different, but still less favourable than before, set of rules - can for the time being be disregarded. This is because the bill that contained these was still going through parliament when President Macron dissolved it, and so is now defunct.
It will therefore not now apply, unless it is brought back again before the new parliament.
Read more: Respite for gite owners in France as harsh tax change is put off
The situation is now only likely to change if the laws surrounding tourist lets are rewritten again in a further bill, or if exemptions are included in the 2025 Finance Bill (which will be passed at the end of this year).
Either of these depends, however, on a government being able to effectively manage the Assemblée nationale to pass laws and include such proposals in a bill to be successfully voted on.
As of the end of July (and until at least the end of the Paris 2024 Olympic Games), France’s political situation is unclear, and it is not known whether the subsequent government will have enough political force to make such changes.
Read more: ‘I won’t be dissolving parliament again,’ says President Macron
You can read more about the taxation rules of holiday rentals in our tax guide here.
