The tax bill will increase for many French people.
It was a paradise for tens of thousands of owners. A dream opportunity, almost too tempting, which many took advantage of, and which remained in force for years. But before long El Dorado will end and we will have to put our hands in our pockets. Goodbye to the great leniency of the tax authorities, the rules will change and the bill will increase. For those interested, this will be around 370 euros more to pay in taxes starting from 2025.
This change will affect approximately one million owners. If it is, obviously, a tightening of taxation for these families, it is in reality a simple rebalancing that will now have to be added to the various, already incompressible – and growing – expenses inherent to owning a house or apartment.
For many years, owners have developed a completely legal way to increase their income: short-term rentals. The rise of AirBnb has contributed to this wave, but other platforms like Leboncoin or Abritel also make it easy to offer your property and be connected to vacationers, all with a secure transaction.
Enough to earn more, without paying too much tax. Until now only 50% (or 29% for classified tourist accommodation facilities) of the income received was subject to taxation. From now on 70% (or 50% for classified tourist establishments) of earnings will be subject to taxes. A non-negligible increase.
According to the director of Airbnb for France and Belgium, Clément Eulry, “the average income generated annually is 3,900 euros gross”, he explained Free midday. Currently this amount corresponds to 920 euros of tax (based on a marginal rate of 30%). In 2025 the amount will rise to 1290 euros, or an additional 370 euros.
The increase in taxation on short-term rentals is not linked to the various current increases. The project has been carried out since the spring of 2023 by two deputies (Annaïg Le Meur -EPR- and Iñaki Echaniz -PS-) to reduce the number of seasonal rentals to allow locals and workers to find accommodation more easily, particularly in Brittany, the Basque Country, on the Mediterranean coast or even in Corsica. Until now, tax rules encouraged short-term rentals. Will this tightening allow the trend to be reversed?
Interview Between Time.news Editor and Tax Expert
Time.news Editor: Good afternoon, and welcome to our special segment on the upcoming changes to property taxes in France. Today, we have a distinguished tax expert, Dr. Emilie Lefevre, with us to discuss the implications of these changes. Emilie, thank you for being here.
Dr. Emilie Lefevre: Thank you for having me! I’m glad to be here to shed some light on this important topic.
Editor: Let’s jump right in. As we’ve read, many French property owners will see an increase in their tax bills starting in 2025. Can you elaborate on how significant this increase will be?
Dr. Lefevre: Absolutely. The anticipated increase is approximately €370 per year for around one million property owners. While this may seem like a modest amount in isolation, when coupled with other rising costs of property ownership, it can create substantial financial pressure for many families.
Editor: That sounds quite concerning. Many owners have relied on short-term rentals, particularly through platforms like Airbnb, to augment their income. How might these tax changes impact that situation?
Dr. Lefevre: The increase in taxation can indeed disrupt the financial equation for short-term rental owners. Many of these individuals have relied on the additional income to support their mortgage payments and property maintenance. As taxes rise, their profit margins will tighten, possibly leading some to reconsider their rental strategies.
Editor: It sounds like a balancing act for many property owners. You mentioned a “rebalancing” of the tax system. What do you mean by that?
Dr. Lefevre: Well, the term “rebalancing” refers to the government’s intent to adjust the tax structure to ensure a fair distribution of tax burdens among property owners. The previous leniency afforded to short-term rental income will be more closely scrutinized, and the adjustments are seen as a way to bring more equity to the tax system.
Editor: So, as the tax authorities tighten their grip, how do you foresee property owners adapting to these changes?
Dr. Lefevre: Many will have to strategize. Some may choose to rent long-term instead of short-term, which could lead to a significant market shift. Others might invest in property improvements to justify rental increases or reduce costs elsewhere. It will certainly incentivize owners to be more proactive about their financial planning.
Editor: That makes sense. What advice would you give to property owners who are facing this imminent tax increase?
Dr. Lefevre: I would advise them to thoroughly review their financial situation now—look at all expenses and income sources. Consulting with a tax professional can also help them explore all possible deductions and adjustments before the tax changes take effect. Being informed and proactive is crucial in minimizing the impact.
Editor: Thank you, Emilie. This has been incredibly insightful. It appears that while these tax changes may be seen as burdensome, they offer a chance for property owners to reassess and adapt their strategies.
Dr. Lefevre: Exactly. It’s all about resilience and understanding the landscape as it evolves. Thank you for having me!
Editor: And thank you to our audience for tuning in. We’ll continue to monitor these developments and keep you informed. Until next time!
