When you own a rental property, the tax authorities take into account the expenses relating to this property. Depending on whether the property is rented bare or furnished, the treatment is different. How are they accounted for? What is this AirBnb niche? Here are some explanations on this tax system.

Renting a bare property

A property rented out without furniture generates property income. In the tax return, this income is added to professional income. If the income does not exceed €15,000 and the property is not covered by certain special schemes, the taxpayer can benefit from the micro-foncier scheme, which allows a flat-rate allowance of 30% to be applied.

By choice or if one of the above-mentioned criteria is not met, the real estate regime applies. In this case, all expenses related to the property in question must be declared. These include, for example, interest on the loan for the acquisition and the work carried out during the year. If the amount of these expenses exceeds the amount of the property income declared for the year, a property deficit arises. By definition, it is deducted from the taxpayer's overall income up to a limit of €10,700, except in special cases. Article 1 of decree no. 2023-297 of 21 April 2023 ratifies a doubling of the deduction limit, i.e. €21,400, provided that the work carried out between 5 November 2022 and 31 December 2025 enables the property to move from an energy class of E, F or G to an A, B, C or D class.

What is the tax treatment of a furnished property?

If the property is rented out in compliance with a number of conditions, if you can live there simply by bringing your travel bag, so to speak, then the income tax system is that of BIC (Industrial and Commercial Profits). Up to a limit of €72,600 for a "simple" rental and €176,200 for hotels, guest rooms, rural gites and furnished tourist accommodation, income is taxed under the micro-BIC system. In the first case, the deduction applied to the income is 50%, whereas for the second type of service, the deduction is 71%. This is where what some call the Airbnb niche comes in.

As accommodation rented for a short period of time, it can be considered as furnished accommodation. In order to be eligible for this and for the 71% allowance to apply, a prior application must be made to the mayor of the municipality where the property is located; if the accommodation is not the main residence of the hirer or if it is located in an area that has implemented a registration procedure.

In all cases, it is possible to opt for the actual system. This solution allows for the deduction of expenses incurred by the property during the year and potentially a depreciation of the property. No deficit can be generated but the income can be fully erased.

Given the exceptions and the rules governing our tax legislation, many elements must be studied. It is therefore essential to be accompanied by a specialist. The Wealth A7 team can advise you, contact us!

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