Accommodation offered to tourists: is Value-Added Tax (VAT) applicable?
Tackling the Tourist Property Rental VAT Dilemma
Got questions about VAT for your tourist property rental activity? Let's break it down!
In a nutshell, furnished rental activities generally dodge VAT. However, if you as a landlord offer at least three out of four hotel-like services, such as greeting guests, cleaning, offering breakfast, and laundering linens, you're required to fork over VAT. But there's a loophole: your turnover must not exceed 85,000 euros for this requirement to kick in.
Worth a Read | Redefining the Tax Regime for Furnished RentalsInitially, lawmakers aimed to reduce this threshold to 25,000 euros. Alas, this measure was put on hold until the end of 2025. A current bill in Parliament, if passed, would scrap this reform altogether. Nonetheless, the topic will be revisited as part of the 2026 budget discussions.
Key Points
The conditions for the tax office to dub a service as hotel-like (and hence penalize you with VAT) have seen recent updates, with alterations made in the summer of 2024 and late March 2025.
For stays spanning five nights or less, providing linens and cleaning only upon entry is now sufficient to meet the condition. The cleaning no longer needs renewal throughout the stay.
Furthermore, if you offer a self-service key box (without other options for giving keys), the greeting condition will no longer apply.
Interesting Read | The Furnished Rental Taxation Becomes Less Attractive
By Baptiste Bochart (Jurist at JD2M, jedeclaremonmeuble.com)
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Background
In France, a landlord may find themselves subject to VAT for furnished rental activities under certain conditions. This implies that the rented dwelling is outfitted with essential furniture and household equipment. The VAT applicable rate for such activities stands at 10%, and landlords who meet specific criteria may qualify for a 20% VAT rebate on related expenses if procured from French-registered companies [1][3].
However, incremental changes in 2024 and 2025 have clarified VAT applicability in furnished rental activities, stressing the furnished status, formal lease requirements, and collection and reclaim rules [2]. Landlords are encouraged to consult legal and tax experts to ensure compliance according to the latest regulations.
Budget discussions in 2026 may revisit the proposed reform of lowering the VAT threshold for furnished rentals from 85,000 euros to 25,000 euros, as initially intended but currently postponed until the end of 2025. Managing personal-finance considerations, it's crucial for landlords to stay informed about the changing VAT regulations for furnished rentals in France, particularly regarding the conditions for deeming a service as hotel-like and thus subject to VAT, which have seen recent updates.
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