On Friday June 9th, France’s Minister of Economy Bruno Le Maire stated that he was in favor of reforming the highly advantageous taxation granted to short-term rentals such as the ones advertised on Airbnb. He deemed the windfall effects “too big”, as well as noting that short-term rentals are suspected of causing housing problems in France. Cities such as New York and Florence have tried to crack down on the proliferation of Airbnbs.
“We’ve reduced the duration to 120 days,” Le Maire said on RMC/BFMTV on Friday, referring to the maximum rental period allowed for primary residences. “What puzzles me is that we keep a favorable tax regime for Airbnb. I’m open to a reform of taxation on Airbnb so that it’s equivalent to that of other accommodation types.”
There is no reason to keep this taxation, which leads to excesses.
Bruno Le Maire, France’s Minister of Economy
Renters of classified furnished tourist accommodation (from 1 to 5 stars) currently benefit from a flat-rate tax allowance of 71% up to 176,200 euros in revenue, compared with 50% for standard furnished accommodation, and 30% for empty rentals up to a limit of 15,000 euros in rental income. “We will make proposals to the Prime Minister and the President of the Republic, but I find it hard to understand the very favorable taxation that applies to Airbnb today,” said Le Maire.
A cross-party bill to regulate furnished rentals has been postponed indefinitely, although it was due to be examined by the French National Assembly in mid-June. One of its aims was to tighten the scale of tax allowances for furnished tourist accommodation, taking into account certain special cases such as mountain resorts. “We will reform the taxation system,” he said. “The only question is one of justice: there are too many windfall effects, too favorable of a taxation. There is no reason to keep this taxation, which leads to excesses.”
During the conclusions of the housing section of the ‘Conseil national de la refondation’, French Prime Minister Elisabeth Borne announced that the tax system for rentals would be reviewed, hoping that this “complex” project would be completed “in the next finance bill”. According to Airbnb France, hundreds of thousands of French people rent accommodation on Airbnb, for a median income of 3,800 euros a year.
According to a survey Airbnb commissioned from Ifop, close to 20% of people in the greater Paris region that do not already rent their home plan to do so during next year’s Olympic Games, as reported by Reuters. “Airbnb helps boost the income of thousands of French families, and 60% say the extra income helps them afford rising living costs,” Airbnb said in a statement. “We want to work with the French government on measures to make their lives easier, not harder, while working together to tackle the root causes of housing challenges.”
