Ending tax breaks for French gites could ease housing crisis

Tax allowances for holiday rentals should be reduced according to recommendations by three government ministries, however an association that represents the letting industry claims this will not be enough to solve the housing crisis.

The government recommendations include lowering the tax allowance on all holiday lets to 50% in areas with housing shortages – particularly seaside areas.

Currently, there is a 71% allowance for properties certified by an organisation such as Gîtes de France. Frédérick Seidita Aires, vice-president of the Union des Professionnels de la Location Touristique (UPLT), said: “The tourism ministry is pushing for change, and there is a strong chance it will happen. It won’t be applicable for 2023, but probably for 2024.”

Current tax break ‘veritable gift’

He notes that while the current tax break is a “veritable gift” to owners of short term lets, it does not encourage the conversion of these properties to primary residences.

However, he said that no longer differentiating between properties which have or have not requested a certification could discourage owners from undertaking improvements – to energy-efficiency, for example.

He believes platforms such as Airbnb have made the problem more visible, as people previously bought second homes for personal use.

He also suggests other factors, including population growth, are contributing to housing strain.

“I believe the real issue is not so much second homes being rented out, but the lack of construction in most towns over the last 20 years.”

Until now, it has been difficult to measure the impact of holiday homes on the housing crisis, as towns collect their own data.

This situation should be improved by the introduction of API meublés, a data sharing program that the government is developing.

The ministries also recommend lowering the income threshold for the micro-BIC tax regime from €176,200 per year to €72,600 – as it is already for long-term furnished rentals.

Not waiting for national legislation

Many town councils have not waited for national legislation to take action.

In 2021, Saint-Malo in Brittany introduced quotas per neighbourhood on short-term rentals, requiring owners to request authorisation at the mairie.

Authorities claim 400 properties have returned to long-term rental or been sold as a result. Sables-d’Olonne, in Vendée in west France, has introduced a similar quota.

Annecy plans to do the same from June 1, when it will limit the number of holiday rentals to 2,200, down from the present 2,800.

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