12 Oct Understanding How Rental Income Is Taxed in France
For anyone earning rental income in France, understanding the tax system is essential. The French tax code distinguishes between unfurnished and furnished rentals — and each follows different rules. Let’s look at how each works, using a simple example of €24,000 in annual rental income.
Unfurnished Rentals — “Revenus Fonciers”
Unfurnished rentals (long-term leases under the civil law) are taxed as property income.
Option 1: Micro-Foncier Regime
If your total rental income is below €15,000 per year, you qualify for the simplified micro-foncier regime. A 30% allowance is automatically deducted to cover expenses.
Taxable income = 70% of rent received.
In our case (€24,000), the limit is exceeded — so you fall under the régime réel, not micro-foncier.
Option 2: Régime Réel
You declare real income and deduct actual expenses: loan interest, insurance, property tax, maintenance, management fees, etc.
If annual costs total €7,000, the taxable amount becomes:
€24,000 – €7,000 = €17,000.
This sum is added to your other income and taxed at your marginal rate, plus 17.2% social contributions.
Example: 30% income tax + 17.2% social charges → effective rate ≈ 47.2%,
so tax ≈ €8,000, net after tax ≈ €16,000.
Furnished Rentals — “Bénéfices Industriels et Commerciaux (BIC)”
Furnished rentals are considered a commercial activity, taxed as BIC income.
Option 1: Micro-BIC
Applies if annual rent ≤ €77,700. You benefit from a 50% allowance (or 71% if classified as “furnished tourism”).
Taxable base = €24,000 × 50% = €12,000.
At the same 47.2% rate → tax ≈ €5,660.
Net income after tax ≈ €18,340.
Option 2: Régime Réel Simplifié
You deduct actual expenses: mortgage interest, depreciation, maintenance, etc.
If these deductions total €8,000, taxable income = €16,000 → tax ≈ €7,550.
Net ≈ €16,450.
Because depreciation often lowers taxable income, the régime réel can be more efficient for investors with high expenses or financed properties.
Professional vs Non-Professional
If your furnished rental income exceeds €23,000/year and it represents your main source of income, you may become a professional landlord (LMP).
Then you must pay social contributions (URSSAF) and may face additional tax complexity — but also benefit from broader deductions and capital-gain exemptions.
Short-Term Rentals (Airbnb-Type)
Short-term rentals fall under the micro-BIC regime by default, with a 50% or 71% allowance, but they also incur:
- Tourist tax (collected by the platform).
- Business registration requirements.
- Possible requalification as professional activity above €23,000/year.
Example:
€24,000 income → taxable €12,000 → tax ≈ €5,660 → net ≈ €18,340,
but with administrative obligations and limits on rental days in cities like Paris.
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