A recent cross-party bill proposed by MPs seeks to limit tax breaks for AirBnb and other short-term let property owners.
The bill claims that the tax incentives for turning a property into a short term rental creates an unequal balance between these rentals and ‘classic’ medium and long-term ones.
It seeks to “remedy these imbalances in the rental market in zones tendues [areas with housing shortages],” and is fronted by MPs from Finistère and Pyrénées-Atlantiques, two departments with a high percentage of tourist lets.
In these areas, workers and students can struggle to find accommodation due to the lack of long-term (more than nine months) options available.
The bill also proposes giving more power to local officials to regulate short-term letting in areas facing a housing shortage.
Although originally drafted last April, the bill will now be assessed by parliament’s economic affairs committee.
Estimates are that more than 800,000 of France’s 35 million or so properties are classed as short-term lets, and they are particularly present in areas popular with tourists, such as coastal communes, the capital, and the Alpine areas.
Focus on taxation ‘fairness’
The bill comprises a number of responses to end the imbalance, although the main focus is on reforming tax reductions applied to owners of short-term lets.
Currently, income earned from short-term lets (meubles de tourisme classés) qualifies for a 71% tax reduction, compared to 50% from ‘traditional’ furnished long-term rentals and 30% for unfurnished ones.
In an area classed as a zone tendue, the bill proposes this tax reduction for short-term lets to be reduced to 50%, in line with long-term lets.
For unclassified tourist lets (meubles de tourisme non-classés) – often those that are occasionally rented and do not have a ‘star rating’ from the government – the bill proposes this reduction should drop to 30%.
In theory, this means that for landlords, it may be more beneficial to rent the property on a long-term basis.
However, in areas not deemed to be suffering from a housing shortage, the current taxation rules would remain, including the 71% tax reduction for short-term lets.
Other changes include energy checks
Another change proposed – that would affect all short-term lets in all locations – would be the requirement for properties to undergo a DPE (diagnostic de performance énergétique) energy audit before being rented out.
A number of landlords currently rent out properties that score low on the scale – and subsequently cannot be rented out long-term – as tourist lets to circumvent rental rules and prevent the need to carry out energy-saving renovations on the properties.
Another change would see a long-term rental dwelling placed on the market for every property converted into a short-term let.
Some communes in the Pays-Basque area already have similar rules in place.
Read more: Rent controls coming in for Pays-Basque
More power for local officials
Finally, the bill seeks to give more powers to elected officials to manage tourist lets in their area.
This could include an authorisation system managed by communes or the requirement to register any short-term lets with the commune, as is the case currently in Paris and Bordeaux.
Local officials could also be given the power to “regulate the establishment of premises for tourist use,” in all areas with housing shortage – currently, this rule applies only to communes with over 200,000 residents and the three departments bordering Paris.
The ability for local officials to create a ‘quota’ of tourist lets is also mentioned – the MPs highlight that many communes which currently try to implement such quotas are frequently taken to court by short-term let landlords.