France has seen a significant rise in short-term rentals like Airbnb, especially in popular tourist regions and cities. However, this increase has impacted the availability and affordability of long-term housing for residents, leading lawmakers to propose a new bill to address these challenges. This article outlines what the proposed legislation means for expats who own or are planning to buy short-term rental properties in France
Table of contents
Why is this law being proposed?
The rapid growth of short-term rentals has turned many French towns into “holiday villages”, leaving locals, students, and essential workers struggling to find affordable, permanent housing. Key areas such as Brittany, the Southwest, and university cities are seeing residents forced out to make way for tourists, with some workers resorting to extreme measures like sleeping in cars during peak tourist seasons. This bill aims to:
- Reduce tax advantages for short-term rentals.
- Enforce stricter regulations on energy performance.
- Grant more regulatory power to local officials, including mayors.
This approach seeks to balance the interests of tourism with the housing needs of local communities.
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What do you need to know and how will it impact you as an Airbnb host?
This new law, now approved by both houses of the French parliament, aims to curb the overuse of short-term tourist rentals, like Airbnbs, to preserve more housing for locals. It doesn’t outlaw platforms like Airbnb or Booking.com, but it does add significant requirements that could impact profitability and operations for property owners. Here is what to expect from the new rules, and how they may affect you as an expat managing or planning short-term rental in France.
Reduced tax benefits for short-term rentals
The new law lowers the tax benefits currently available to short-term rental owners:
- Classified rentals and guest rooms: The tax deduction rate will decrease from 71% to 50%, with an annual income cap of 77,700 €.
- Non-classified rentals: For unclassified rentals, which includes most Airbnbs, the deduction rate will fall from 50% to 30%, with a reduced income cap of 15,000 €.
These changes start with income earned in 2025, so the existing rates will still apply for 2024.
Impact on hosts: Reduced tax deductions may affect your bottom line, potentially making short-term rentals less profitable. You may need to reevaluate the return on investment based on these new rates and consider if short-term rentals are still viable for you under these conditions.
Mandatory energy performance certificate (DPE)
Under the new law, short-term rentals must comply with France’s energy performance standards, which currently don’t apply to tourist rentals.
- Starting in 205: New short-term rentals in high-demand areas must have a DPE rating of at least F.
- By 2028: This minimum rating increased to E.
- By 2034: All rentals must meet a DPE rating between A and D.
Failing to meet these standards may result in fines of up to 5,000 €.
Impact on hosts: Property owners will likely need to invest in energy-efficient improvements to meet the requirements, which adds to the cost of maintaining a short-term rental. If your property doesn’t currently meet these standards, budget for potential upgrades to stay compliant.
Enhanced powers for mayors
Local authorities will have increased control over short-term rentals, including new registration requirements and penalties:
- Registration: All short-term rentals will need to register with the city council, ensuring that each property meets requirements like safety and DPE standards.
- Fines for non-compliance: Mayors can now issue fines of up to 10,000 € for unregistered rentals and up up 20,000 € for false declarations.
- Quotas and limits: Cities can establish quotas on tourist rentals and identify areas reserved for primary residences.
- 90-day cap: Starting in 2025, municipalities can limit primary residences to 90 days of tourist rentals per year (down from 120 days)
Impact on hosts: These new powers allow mayors to impose stricter rules on tourist rentals in popular areas, potentially limiting how often you can rent out your property. For those who rely on peak-season income, this 90-day cap might limit revenue, so be sure to consider these restrictions as you plan your rental schedule.
Rules for tourist rentals within co-properties
For those in co-owned properties, this new law also brings changes:
- Co-ownership amendments: Agreements can now be amended by a two-thirds majority to prohibit short-term rentals, compared to the previous unanimity requirement.
- Rental notifications: Building managers must be notified of a property is intended for short-term rentals, and short-term rental policies must be discussed at the next general co-owner meeting.
- Clear guidelines in new co-ownership agreements: Any new co-ownership agreements must specify if short-term rentals are allowed.
Impact on hosts: If you own property within a co-ownership (like an apartment in a larger building), your ability to rent short-term may be limited based on the co-owner consensus. This change emphasises the need for clear communication with building management and compliance with all building-specific regulations to avoid potential conflicts or penalties.
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What does this mean for Airbnb hosts in France?
This law does not aim to ban Airbnb, but it will make hosting on short-term rental platforms more regulated and potentially more costly. As an expat with property in France, here are some options and considerations to adapt to the new rules:
- Consider long-term rentals: Switching to long-term rentals could offer better tax benefits and stable income, particularly in areas where tourist rentals are becoming highly restricted.
- Invest in energy efficiency: To keep your rental compliant with the DPE standards, consider upgrades that improve energy performance, such as installing better insulation, double-glazed windows or more efficient heating systems.
- Stay informed on local regulations: With increased powers for mayors, local rules could vary widely. Be sure to consult with local professionals and stay updated on the rules specific to your area.
- Engage with co-owners: If your rental is within a co-owned property, ensure you have the support of co-owners and that all necessary notifications and approvals are in place.
While this new law presents new challenges for Airbnb hosts, it also offers opportunities to adjust and find new ways to maximise the value of your property. By staying informed and proactive, expats with short-term rentals in France can still navigate these changes successfully.
Final notes
The new regulations on short-term rentals in France mark a significant shift in how the industry will operate, especially for expats who rely on Airbnb and similar platforms for supplemental income. By tightening tax benefits, enforcing energy efficiency standards, and giving local authorities greater control, the law aims to balance tourism with the needs of local housing markets. For expats, this means navigating more complex compliance requirements and possibly rethinking the financial viability of short-term rentals. You can read more about the law here.
