FURNISHED RENTAL : WHAT ARE THE TAX PARTICULARITIES ?
17 August 2022
CONDITIONS FOR RENTING FURNISHED ACCOMMODATIONTo be able to rent a furnished apartment and benefit from the associated tax advantages, it is necessary to respect the criteria of decency, but also of furnishing which are fixed in the Alur law.
We distinguish two different types of rentals:
- With long-term furnished rentals, the lease must be signed for a minimum of one year (9 months for students) and is renewed tacitly in the absence of notice of departure (except for student rentals). The notice period is one month in the case of a notice given by the tenant and three months in the case of a notice given by the owner. Finally, the security deposit cannot exceed two months rent excluding charges.
- With short-term rentals, called furnished tourist accommodation, the rental period is 90 days maximum, and the security deposit is generally 20% of the rental price.
THE MICRO-BIC REGIMEWhen renting furnished accommodation, the Micro-BIC regime applies automatically if your income from the rental does not exceed 72 600 € for residential accommodation, and 176 200 € for bed and breakfast and furnished tourist accommodation. Whether you are a non-professional (LMNP) or a professional (LMP) furnished renter, you declare the amount of money received from the rental, and you benefit from a deduction of:
- 50 % if it is about housing rentals.
- 71% for bed and breakfast or furnished tourist accommodation.
THE REAL REGIMEThe real regime is the most advantageous fiscally, because it allows you to create a BIC accounting deficit after deduction of expenses and depreciation. It applies by default when your ,rental income exceeds €72,600 or €176,200 depending on the type of rental. In addition, the simplified real regime is also available by right below the threshold of €72.600 € and €176.200, in two cases:
- If this system is clearly more favorable than the Micro-BIC system: in this case, the real system is available on option from the tax authorities.
- If the property is held in joint ownership, as is the case for married couples in separation of property, civil union couples, cohabitants, friends, or cousins, etc.
All expenses and charges associated with the property and the rental of the property can be deducted from the income. For example, you can deduct property tax, maintenance, and repair bills, equipment, insurance costs, loan interest, condominium fees, travel expenses to attend a general meeting, management fees, etc.
The real system also allows you to deduct the depreciation of furniture, works and real estate. With this operation, your taxable amount decreases significantly, or may even become zero.