The right formula for renting out your second home

Why rent out your second home?

40% of homeowners rent out their second home, so why shouldn't you? In fact, renting out your house or apartment for a few weeks a year can help cover the costs. When you add it all up, between condominium fees, heating, property tax... the bill can sometimes be quite steep! So choose the period when demand for rentals is highest, to optimize your income while enjoying your property in off-peak periods. For other owners, on the other hand, it's simply a matter of making the most of their property investment. Seasonal furnished rental (or "location meublée de tourisme") is the obvious choice. To qualify as seasonal, the rental must be of short duration, i.e. less than 3 months, and relate to the tourist season. It must therefore be distinguished from a classic furnished rental, for the following reasons:
- It is concluded from date to date for a very short period;
- There is no possibility of tacit renewal on expiry;
- It is aimed at a transient clientele;
- Under no circumstances can the rented property be considered the tenant's principal residence.

Definition of meublé de tourisme rented on a seasonal basis
Article L324-1-1 of the French Tourism Code states:
"Furnished tourist accommodations are furnished villas, apartments or studios, for the exclusive use of the tenant, offered for rental to a visiting clientele who do not elect domicile there and who make a stay characterized by a daily, weekly or monthly rental."

Steps to take

Renting out your second home is not an operation to be taken lightly. With the ever-increasing complexity of our legislation, you could quickly find yourself "outside the law". Unlike a principal residence, which requires no specific formalities if rented for no more than 4 months, renting out your second home means you have to declare your property as a "secondary residence".This is true regardless of the annual rental period. This is not a request for authorization, but simply information provided to your municipality (failure to declare can nevertheless cost you a fine of €450).
Regulations are different if your second home is located in an area where the rental market is tight. In towns with a population of over 200,000, as well as Paris and most of the inner suburbs, before you rent out your second home, you'll need to obtain a temporary change-of-use authorization from the local council.

Renting out your second home and LMNP

Two different tax regimes apply to the two types of property rental: Loueur Meublé Professionnel (LMP) and Loueur Meublé Non Professionnel (LMNP). A "professional" property owner is one who is registered with the French Trade and Companies Registry and whose rental income exceeds €23,000 per year. In addition, these revenues must exceed other taxable income. In other cases (rental income below €23,000), the furnished property owner will be considered as a non-professional and will be subject to LMNP status. Please note that this income must represent less than 50% of your annual income!
To qualify for LMNP status, the rental property must meet certain criteria set out in the ALUR law. There are 11 compulsory items of equipment, so that the tenant only has to put down his or her suitcases when arriving: bed linen, refrigerator, cutlery, etc. Pursuant to article 8 of the ALUR law, furnished accommodation is "decent accommodation equipped with a sufficient number and quality of furnishings to enable the tenant to sleep, eat and live suitably in terms of the requirements of everyday life".
There are special formalities for renting out your second home and qualifying for LMNP status:
- If you're in a condominium, check that the condominium bylaws allow you to rent out your apartment on a seasonal basis,
- File a declaration of existence with the commercial court clerk's office within 15 days of the start of the rental period,
- Declare the rental of your second home to the town hall,
- Once you've obtained your SIRET number, choose your tax regime.

You can choose between two different tax regimes:
The micro BIC system allows you to benefit from a 50% tax allowance (or 71% for "Gîtes de France" or "Meublé de tourisme" rentals). This is possible if your annual sales are below the micro-business ceilings (33,200 for a standard furnished rental and 82,800 for "Meublés de tourisme" and "Gîtes de France").
Under the "régime réel", you can deduct your expenses from your profits. This option is obvious if you exceed the ceiling or if your expenses are high.

Applying for classification

You can apply to have your meublé or gîte classified as a " meublé de tourisme ". This is part of our commitment to offering quality services to holidaymakers. The classification of a meublé de tourisme indicates its level of comfort and equipment to the customer. There are 5 categories (from 1 to 5 stars). This allows you to benefit from a number of tax advantages (exemption from property and council tax, flat-rate allowance on rental income under the micro-business scheme). It also avoids the application of a higher tourist tax. Applications must be made to COFRAC (the French Accreditation Committee) or the "Atout France" website, using Cerfa form no. 11819*03. Classification lasts for five years, and is awarded following a classification visit. The two best-known labels are "Gîtes de France" and "Clévacances". But there are others. Find out more before you choose your label! Each label has its own grading system and its own requirements.

Tourist tax
Since January 1, 2019, a tourist tax of between 1% and 5% has been applied to unclassified or non-classified furnished accommodation.

Stéphanie Swiklinski