Taxation of Furnished Rental Income 2023/24
8th April 2024
A generous tax allowance is available this year on income from certain classed furnished rental properties.
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Taxation of Furnished Rental Income 2023/24
8th April 2024
A generous tax allowance is available this year on income from certain classed furnished rental properties.
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We recently reported on a change to the taxation of rental income on seasonal lettings (meublés de tourisme).
The change applies to landlords who use the ‘micro’ form of taxation, which grants a fixed tax allowance on gross rental income.
Although the new law reduced the tax advantage to 30%, for certain rental properties a more generous regime was (possibly inadvertently) introduced.
In addition to the previous allowance of 71% for classed properties (meublé de tourisme classée), a further allowance of 21% has been granted, taking the total tax allowance for such properties to 92%.
The allowance applies provided the property is located outside an area of housing stress*, and that the gross income is no greater than €15,000.
Thus, in the guidance recently issued it states: 'For income from non-professional furnished lets declared under the micro-BIC scheme, an extra allowance of 21% is available for classed furnished tourist lets, given that they are outside zones where there is a great imbalance between demand and supply of housing, and the previous year's turnover was less than €15,000. This allowance can be added to the allowance of 71% already permitted, bringing the total allowance to 92%.'
If the property is not classed, for 2023 rental income, owners can, by option, continue to be taxed using the previous rules.
Chambres d'hotes using the micro regime continue to benefit from a turnover cap of €177,000 and a tax allowance of 71%.
Similarly, long-term furnished lettings are also exempt from the new rules.
These changes only apply to 2023 income, to be declared on the 2024 tax return.
A major review of furnished lettings taxation is currently under way, with proposals due to be published later in the year.
*A map showing the location of areas of housing stress can be found at Zonage A, B, C
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