The Senate's anti-Airbnb law has been officially adopted and it provides for numerous changes with tougher regulations, a more reduced tax loophole, but also numerous energy requirements for owners. In this article, we will detail the essential points so that you can find your way around.
The Objectives of The Anti-Airbnb Law
Supervision of Tourist Rentals
Rare enough to be highlighted, the Senate's anti-Airbnb law was passed unanimously on first reading. Its objective is to reduce imbalances in the rental market with stricter supervision of rentals of furnished tourist accommodation. As a result, the Le Meur law, which owes its name to MP Renaissance, targets potential speculators to greatly limit the proliferation of the seasonal rental market so that traditional rentals can get a second wind.
Advantageous Tax Reduction for Furnished Tourist Accommodation
Previously, a considerable tax advantage was present in furnished rentals resulting in a reduction in the tax base of 71% from the moment the limit of €188,700 of rental income was respected. As it currently stands, the law provides for lowering this tax advantage to 50%, but also a considerable reduction in the ceiling of €77,700 in annual turnover.
Why Is This Law Necessary?
The Housing Crisis in France
It is obvious that the French real estate market is experiencing a real shortage of available properties. In just two years, we have observed a drop of around 36% in available apartment offers. Despite this crisis, the increase in rents is a reality with an average increase of 3.5% during the year 2023. This trend has also become more pronounced in large cities such as in the French capital with a drop in rents. rental advertisements of around 74% in just three years.
This is why this law was enacted to address the current situation and impose much stricter Airbnb limits for people wishing to get into seasonal rentals.
Other Imbalance Factors
It is also important to take into consideration other factors causing an imbalance and leading to the implementation of a law directly impacting Airbnb owners. It must be emphasized that rent control remains a real obstacle to the development of traditional rentals. However, this law has already been applied in many towns in the territory.
This is not the only reason, the ban on renting real estate with the energy label G to the DPE also leads to a tightening which will also be stronger and stronger over the coming years. The disruption of the rental market can also be explained by borrowing conditions which have become increasingly difficult, resulting in a sharp increase in interest rates.
When we combine these different negative elements, seasonal rental seemed obvious. The impact of platforms is a reality with the creation of real real estate speculation to the disadvantage of people looking for sustainable housing to rent.
What Is The Impact of The Anti-Airbnb Law On Owners?
Tax Changes
It is obvious that seasonal rental generates much greater income compared to traditional rental. A situation which can be explained by the attractiveness of the market, but also a more attractive tax regime. This is why the anti-Airbnb law plans to reduce the tax advantages by imposing a new deduction rate which will normally come into force during the year 2025.
For unclassified furnished accommodation, it must be taken into consideration that the tax advantage drops from 50 to 30% with a limit of €23,000 compared to €77,000 at present. At the level of classified furnished accommodation, the tax advantage will be lowered from 71 to 50% with a limit going from €188,700 to €77,700.
Financial Repercussions
With the application of the anti-Airbnb law passed by the Senate, it is obvious that rental income will be much less significant for seasonal rentals. This is precisely the primary objective in order to force owners to move back towards long-term rentals rather than short-term rentals. If there is no change, rental income will necessarily be much less attractive due to the much harsher taxation. With less attractive taxation, it is entirely legitimate to ask the question of whether it is preferable to continue with seasonal rentals.
To answer this question, it is better to carry out a very precise market study taking into consideration the income potentially generated by a short-term rental with a comparison with a long-term rental. If you have certain difficulties in this area, do not hesitate to contact a specialist in order to receive sound advice.
Uncertainties Linked to The Dissolution of The National Assembly
Potential Impact on The Adoption of The Law
The real estate sector is already under considerable pressure and since the dissolution of the National Assembly, this feeling is increasing. It is obvious that France is currently in a period of transition and for the moment the anti-Airbnb law which was being adopted and applied will necessarily be delayed. Consequently, it will not necessarily be applied, it is simply put on hold until a new government is formed.
In other words, debates on the subject are temporarily interrupted with an uncertain future on the subject. Once the government is established, the question of the anti-Airbnb law will obviously be put back on the agenda with its possible adoption according to the conditions defined previously or completely remodeled with its possible removal.
In any case, high expectations are expected in the real estate sector with an approach between different parties such as residents' associations, rental platforms and of course local authorities. In a fairly tense context, it is difficult to have a clear vision and it will be necessary to wait several weeks or months before having a definitive answer.
Conclusion
The anti-Airbnb law, if adopted in its current state, will cause a real upheaval in seasonal rentals. However, it should always be taken with a grain of salt, because the dissolution of the National Assembly has reshuffled the cards. However, we advise you to exercise the greatest vigilance and to keep yourself informed of current events to anticipate such an implementation. Also, do not hesitate to trust a specialist in the field to be informed in the right way.
For homeowners who feel overwhelmed by the uncertainty and complexity of this new law, Upperkey can provide valuable support. We offer comprehensive property management services, allowing owners to delegate the most stressful aspects of vacation rentals. By working with experts who understand the nuances of ever-changing regulations, homeowners can navigate these legislative changes with confidence and peace of mind.