In summary
| 🌍 Section | 📜 Details |
|---|---|
| 🏠 What is the housing tax? | A local annual tax benefiting local communities, funding public services such as road maintenance and municipal facilities. |
| 🧑💼 Who is concerned? | Payable by the person occupying the property on January 1st, whether owner or tenant, regardless of the duration of their stay during the year. |
| 📊 Tax calculation | Based on the cadastral rental value of the property, influenced by size, location, and the household’s income and composition. |
| 🔄 Tax reform | Gradual removal since 2023 for principal residences, but not for secondary residences or seasonal furnished rentals. |
| 🏖️ Tax on secondary residences | Remains applicable to secondary residences. Some municipalities may impose an additional levy in high-demand areas. |
| 🛋️ Cases of furnished rentals | Apply to seasonal furnished rentals. Owners must pay unless they prove continuous rental throughout the year. |
| 💬 Owner’s responsibility | Owners are generally responsible, though proving an annual rental to third parties can exempt them, requiring them to pay the CFE. |
| ❓ Possible exemptions | Owners may be exempt from the tax if they prove they did not personally use the property and it is continuously rented. |
| 🤔 CFE vs. housing tax | The CFE applies to professional rental activities; distinct from the housing tax, which applies to residential use. |
| 🆘 If there is a dispute | Contact the tax authorities with proof such as rental contracts or payment evidence to contest unfair tax claims. |
Seasonal furnished rentals are a popular way to monetize a secondary residence, but it is important to understand the tax implications, particularly concerning the housing tax. Here is a guide to understand who is liable to pay it.
What is the housing tax?
A local tax serving communities
The housing tax is a local tax levied annually for the benefit of local authorities. It is essential to finance local public services that directly benefit residents. For example, this tax funds green space maintenance, roads, and the management of municipal facilities such as schools and sports facilities. Additionally, it ensures infrastructure like public lighting or waste collection, services enjoyed by all residents.
Who is affected by the housing tax?
The housing tax is due by the person occupying the property on January 1st of the tax year. This can be the owner or the tenant, depending on the situation. This rule applies regardless of how long the property has been occupied during the year. Therefore, even if you move or start renting after January 1st, the occupant at that date is responsible for paying the tax for the entire year. The tax does not operate on a prorated basis, meaning it cannot be divided proportionally to the occupancy period.
Calculation of the housing tax
The amount of the housing tax is based on several factors. The primary one is the cadastral rental value of the property, which is the theoretical value the property could generate if rented. This value considers various criteria such as the size of the apartment, number of rooms, amenities, and geographic location. The larger and more desirable a property, the higher its rental value will be.
Other factors include the household income and its composition. Families with children or dependents may benefit from tax allowances, reducing the amount owed.
Housing tax reform on primary residences
Since the reform of 2023, the housing tax has been progressively abolished for principal residences. This reform aims to ease the fiscal burden on households occupying their main residence. As a result, many taxpayers no longer pay this tax for their primary home. However, this exemption does not apply to second homes or seasonal furnished rentals.
Housing tax and secondary residences
The housing tax remains in effect for second residences. These homes, not used as a primary residence by the owner, are still subject to this levy. Moreover, certain municipalities may apply a additional tax on the housing tax for secondary residences located in “tight” zones, where demand exceeds supply.
Special case of seasonal furnished rentals
Seasonal furnished rentals are also subject to the housing tax. The owner of a property intended for seasonal rental must generally pay the tax, even if they do not occupy the property on January 1st. However, if the owner can prove that the property is rented continuously throughout the year, they may be exempt. In that case, they will still be liable for the Land Contribution (CFE), a tax payable by owners engaged in professional rental activities.
Who should pay the housing tax for a seasonal furnished rental?
The question of the housing tax for a seasonal furnished rental is often confusing for owners. It is important to understand the applicable rules to avoid misunderstandings with the tax authorities.
The owner’s responsibility
In a seasonal rental, the owner is generally liable for the housing tax, even if they do not occupy the property on January 1st. Unlike long-term rentals, where the tenant is responsible for paying the tax, the short and temporary nature of seasonal rentals means the owner often remains the one liable to pay this levy.
This is because the owner has the option to use the property at any time of the year. Even if the property is rented most of the time, the mere fact that the owner can stay there for a few days or weeks is enough to justify their obligation to pay the housing tax.
Possible exemption cases
However, there are situations where the owner may be exempt from paying the housing tax. To do so, they must prove that the property is rented continuously throughout the year without allowing personal use. This means the property must be exclusively intended for seasonal rental and not used by the owner or their relatives.
In this case, the owner may be exempt from the housing tax but will still be subject to the Land Contribution (CFE). The CFE is a local tax applicable to anyone engaged in a professional activity, including furnished rentals. The amount of CFE is based on the rental value of the property and the income generated by this activity.
Furnished rentals and enjoyment of the property
French case law is clear: as soon as the owner can be considered to have enjoyed the property at any time of the year, they are liable for the housing tax. This even includes holiday periods or times when the owner decides to use the property for personal use. Therefore, many owners of second residences intended for seasonal rental must pay the housing tax.
Are there exemptions for owners?
Exemption under specific conditions
It is indeed possible for a owner to benefit from an exemption from the housing tax, but this depends on certain strict conditions. The exemption mainly applies if the property is rented continuously throughout the year without the owner reserving personal use, even for a short period. To obtain this exemption, the owner must prove that the property is exclusively dedicated to seasonal rental and that they do not reside there nor retain enjoyment rights.
Required proofs for exemption
To benefit from this exemption, the owner must be able to provide supporting documents demonstrating that the property is indeed rented continuously. These documents may include:
- Rental contracts proving the property was occupied by tenants throughout the year.
- A management mandate signed with a rental agency or platform like Airbnb, showing that management has been entrusted and the owner could not stay there.
- Availability calendars showing the property was continually offered for rent, with bookings covering the entire year.
- Proofs of payment of rent or bank statements showing transactions related to rentals.
If these conditions are met, the owner can avoid paying the housing tax.
Obligation to pay the Land Contribution (CFE)
However, even if the exemption from the housing tax is granted, the owner must pay the Land Contribution (CFE). The CFE applies to anyone engaged in a professional activity, and furnished rental is considered such an activity.
The CFE is calculated based on the rental value of the property and can vary according to the income generated by the rental activity. The minimum amount of this levy was about €227 in 2022 but can be higher depending on the property’s location and turnover.
Other special cases
In some cases, if the property is classified as tourist furnished accommodation, the owner may also be exempt from the housing tax, provided it is not their personal residence. If the owner uses the property for personal purposes part of the year, they cannot benefit from this exemption and must pay the housing tax.
What is the difference between the housing tax and the CFE?
Nature of taxes
The housing tax and the Land Contribution (CFE) are two local taxes but apply in very different situations. The housing tax is payable by occupants of a residence on January 1 of the tax year, whether owners or tenants. It mainly applies to primary and secondary residences.
In contrast, the CFE is a specific tax on those engaged in a professional activity, and in the case of furnished rentals, it applies if the property is used exclusively for a non-professional furnished rental. The CFE is thus linked to a commercial or professional activity, unlike the housing tax, which concerns the personal occupancy of a property.
Application conditions
The housing tax applies to any habitable property, whether a primary residence, secondary residence, or seasonal rental, if the owner retains enjoyment of the property at any time during the year. In other words, even if the property is rented part of the year, the simple possibility for the owner to use it for personal purposes makes them responsible for paying the housing tax.
The CFE, on the other hand, applies when the owner uses the property exclusively for furnished rentals and does not retain personal enjoyment. If the property is rented continuously without the owner staying there, they are exempt from the housing tax but must pay the CFE.
Calculation method
The housing tax is calculated based on the cadastral rental value of the property, considering elements such as size, comfort, and location. The amount can be adjusted based on household income and family composition, with possible allowances for families with children or dependents.
The CFE is, however, calculated based on the rental value of the premises used for the professional activity, i.e., the furnished rental. It is also influenced by the turnover generated. The rental value of the property for the year N-2 (two years before the tax year) is usually used as the basis.
Exemptions and obligations
For the housing tax, if the owner can prove the property is rented throughout the year without personal use, they may be exempt. However, in this case, they must pay the CFE. In summary, these two taxes are mutually exclusive: if the owner must pay the CFE, they are generally exempt from the housing tax, and vice versa.
Secondary residences and tourist rentals
For second residences used as seasonal rentals, the housing tax is payable if the owner uses the property for personal purposes part of the year. However, if the property is classified as tourist furnished accommodation and is exclusively rented out, the CFE will apply instead of the housing tax, provided the property is not the owner’s personal residence.
What to do in case of dispute with the tax authorities?
Contact the tax office
If you receive a claim for the housing tax that you consider unjustified, the first step is to contact the tax office for businesses or individuals (depending on your situation). It is important to do this quickly to avoid penalties or additional surcharges on the claimed amount.
The owner must explain their situation clearly and provide all relevant information justifying exemption from the housing tax, especially if the property is rented as seasonal rental without personal enjoyment.
Provide supporting documents
To support your request, it is crucial to present solid proof that the property is rented continuously and that you did not stay there or reserve the right to use it personally. Supporting documents may include:
- Rental contracts proving the property was occupied by tenants throughout the year.
- A management mandate signed with a rental agency or platform like Airbnb, demonstrating that management has been entrusted and that you could not stay there.
- Reservation calendars showing the periods during which the property was rented, covering the entire year.
- Proofs of payment of rents or bank statements showing related transactions.
These documents are essential to prove you did not enjoy the property during the year and that the housing tax should not apply.
Follow-up on the claim
After submitting your request, it is important to monitor the progression of your claim. The tax office may request additional information or conduct a more detailed investigation into the management of the property. In case of a prolonged dispute or an unfavorable decision, it is possible to appeal before the administrative courts.
Consult a tax expert
In complex situations or if communication with the tax authorities does not lead to a satisfactory resolution, it may be wise to consult a certified public accountant or a tax advisor. These professionals can help you present a solid case, better understand your rights, and avoid mistakes in your procedures.
Appeal before administrative courts
If your exemption or reduction request is rejected by the tax authorities, you can consider appealing before the administrative tribunal. This process may take longer but allows you to defend your rights against a decision deemed unfair. Again, having a tax expert by your side can be an asset in managing this dispute.
In summary, the housing tax for a seasonal furnished rental must be paid by the owner if the property is occupied or they retain enjoyment rights. However, solutions such as year-round rental may allow you to avoid this tax, in exchange for paying the CFE.
