France already imposes several restrictions on people who want to rent out their property via the holiday letting platform Airbnb, but new legislation making its way through the French parliament is set to tighten the rules further.

Across Europe, the platform is often blamed for housing shortages in tourist hotspots – with local leaders saying that locals are priced out of the market because landlords can make a bigger profit renting out property to tourists, with cities including Barcelona and Paris bringing in stricter controls.

Although France already imposes controls at both a national and a local level, a new law is now being debated which would, among other things, close tax loopholes for landlords.

The bill, proposed by MPs from Emmanuel Macron’s centrist party and the centre-left Parti Socialiste, has already been approved in the Assemblée nationale and is now being debated in the Senate. Senators are also broadly in favour but have added some amendments – that means the bill will have to go back to the Assemblée but with the overall agreement of politicians in both chambers it seems likely that the bill will be passed in something similar to its current form.

Tax loopholes

The biggest change in the bill will be closing a ‘tax loophole’ that makes it advantageous for landlords to rent out properties as a holiday rental.

Tax on income from property rentals is currently charged at a variable rate depending on whether the property is rented furnished or unfurnished and as a long-term rental or a short-term holiday let.

Politicians say that the current rates mean that landlords are rewarded with lower tax rates for letting on Airbnb, and want to change the tax system to incentivise landlords to let long-term to tenants who will live there (in France, most long-term rentals are unfurnished).

The exact tax rates are the subject of amendments between the two different houses of parliament, but it seems likely that the tax rates will change.

Communist senator Ian Brossat denounced “an absurdity which means that a landlord pays more tax if he rents his property year-round to a worker than if he rents his property to tourists”.

Local restrictions

At present most of the strictest restrictions on Airbnb rentals are at a local level – for example, the city of Paris has a total ban on second-homes being advertised on Airbnb, while people renting out their main residence are limited to 120 days per year.

Meanwhile, in Pyrenees-Atlantique, one commune is bringing in rules that require anyone letting a property full-time on Airbnb to show that they are also letting at least one property to a long-term tenant. 

Numerous other local authorities, mostly in touristy areas, have their own restrictions on rentals via the platform.

In many areas you are required to register with the mairie if you want to let out your property.

The bill aims at strengthening powers for local authorities to impose Airbnb restrictions, although the Senate rejected a proposal to further lower the limit for temporary rentals to 90 days per year. 

Tax declarations

Although tax rates may change, the bill does not change the current rules on declaring Airbnb income. Anyone who rents out a French property on Airbnb for even one day a year must declare the income to French tax authorities – even if they do not live in France.

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