The city of Lyon [Credit: Bastien Nvs on Unsplash]

Tax legislation set to be introduced in France by early autumn

France: New nationwide legislation that will close tax loopholes for short-term rental platforms in France is expected to be officially approved in early June, ahead of a formal introduction into law by early autumn. 

In November, the French Senate approved measures to implement tougher taxation on short-term rentals in order to address a perceived “distortion of competition” compared to the country’s hotel sector.

The Senate is now set to pass a strict law that will adjust the existing tax deduction for property owners letting out tourist accommodation from the current level of 71 per cent to 30 per cent. However, a 50 per cent deduction will remain in place for classified furnished accommodations as an acknowledgement to driving high-quality tourism.

The legislation is also expected to grant mayors across France the authority to restrict short-term rental operations in their municipalities to 120 days per year, in line with other cities across Europe. French mayors want greater powers to control the development of housing stock in cities, including regulating the proliferation of second homes and increasing housing supply for primary residences, and potentially introducing a registration number for all short-term rentals across France.

According to reports, the proposed legislation is gaining more cross-party support, while Clément Eulry, managing director for France and Belgium at Airbnb, has said that he is broadly in favour of the incoming laws.

In 2023, President Emmanuel Macron’s government introduced a set of 14 regulations that were designed to limit the prevalence of short-term rentals for tourists in city centres.

Proposals to tax short-term rentals with VAT [value added tax], as hotels in France currently are, have been being principally driven by the liberal-conservative Les Républicains and Communist group. Under the legislation up until now, rentals can only be taxed with VAT if they specifically provide breakfast, regular cleaning services and household linen, making it a relatively rare occurrence in France.

The French Government will ultimately decide on the legislation itself, either enacting its own legislation without a vote taking place in the French National Assembly or rejecting the Senate-approved measures by invoking Article 49.3 of France’s Constitution.

Meanwhile, on a broader European scale, EU regulation on data collection and sharing for short-term accommodation services moved a step closer in February after the European Parliament approved an agreement on a draft regulation to “promote a balanced tourism ecosystem”. Once the legislation is formally adopted, platforms including Airbnb,, Expedia Group / Vrbo and TripAdvisor will be required to transmit activity data to the public authorities across the bloc on a monthly basis, while the 27 member states will create Single Digital Entry Points for the seamless collection and exchange of information.

Once approved, the new regulation will apply 24 months [two years] after coming into effect.

The proposal for a regulation aims to enhance transparency in the short-term rental sector across the EU, as well as help public authorities appropriately regulate the segment. While online short-term rental platforms and the sharing economy have provided benefits for hosts and tourists respectively, local communities have argued that it has contributed to a shortage of affordable housing and a hike in housing prices in their areas.

Under the terms of the provisional agreement, the new rules will require a unique registration number to be displayed on property websites in order to improve the collection and sharing of data from hosts and online platforms. The data generated will be shared between public administrations across the EU, feeding into tourism statistics and allowing administrations to block illegal rental offerings.

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