On November 7, 2024, the anti-Airbnb law was adopted, bringing significant changes for professional renters and sub-renters. While some aspects of this law aim to better regulate short-term rentals, it also represents an opportunity for investors in certain less-restricted areas. This law affects three key areas: taxation, the powers of mayors, and condominium regulations. Here are the main changes to be aware of.
Taxation: A more restrictive framework
The anti-Airbnb law introduces reduced tax deductions for short-term rentals.
- Non-classified furnished rentals: The deduction is reduced from 50% to 30%, with a cap of €15,000.
- Classified furnished rentals and guest rooms: The deduction is reduced from 71% to 50%, with a cap of €77,700.
Renters exceeding these thresholds will have to opt for the actual tax regime. Professionals are encouraged to consult a certified accountant to anticipate the tax impacts starting January 1, 2025.
Powers of mayors: More control over rentals
Mayors will have enhanced powers to regulate short-term rentals in their municipalities. Some of their new responsibilities include:
- Reducing the rental duration: Mayors can reduce the maximum rental period for primary residences from 120 days to 90 days per year in certain municipalities.
- Setting quotas: Municipalities can limit the number of tourist rentals in high-demand areas by establishing quotas.
- Mandatory registration: Property owners must now register each rental property. This process will help mayors better control compliance with regulations, particularly energy performance requirements.
Energy compliance: Mandatory energy standards
Tourist accommodations will have to meet strict energy performance standards:
- Energy performance certificate (DPE): From 2025, it will be mandatory in high-demand areas, with a requirement to achieve a classification of F or better by 2028. For other areas, this requirement will come into effect by 2034.
- Failure to comply with these regulations will result in fines ranging from €10,000 to €20,000. Mayors will have the power to suspend the registration of non-compliant properties.
Condominiums: Increased control
Modifications to condominium regulations give property owners more power to ban short-term rentals:
- Modifying the condominium rules: Condominiums can now ban short-term rentals by a two-thirds majority of owners, but only if a “bourgeois residence” clause that prohibits commercial activities is already in place. If such a clause does not exist, no changes can be made.
- New regulations: Starting January 1, 2025, new condominium regulations will need to clearly state whether short-term rentals are allowed.
- Obligation to inform the property manager: From January 1, 2025, owners who wish to rent their property for short-term rentals must inform the property manager (syndic). While the syndic is not required to approve the activity, the information must be provided. This obligation aims to improve transparency and control within condominiums. However, if you own property outside of a condominium, this rule does not apply.
Opportunities in small and medium-sized towns
Tight regulations mainly impact high-demand areas. There are interesting opportunities in small and medium-sized towns where restrictions are less severe. These areas, often considered “non-tight,” offer attractive markets for short-term rentals.
- Non-tight zones: A market to explore: Subprefectures and cities with populations between 20,000 and 100,000 are experiencing significant growth. In these areas, legal restrictions are less strict, allowing professional renters to expand while meeting a growing demand from travelers. These towns also offer high potential for profitability for real estate investors, driven by lower acquisition costs compared to major metropolitan areas.
- Increased profitability for investors: For investors looking to buy apartments or buildings to convert into tourist rentals, these non-tight zones represent an attractive profitability opportunity. By reducing acquisition and maintenance costs while benefiting from growing tourist demand, these towns can offer a more sustainable return on investment compared to larger cities where restrictions are more numerous.
Conclusion: A rapidly evolving market
The 2024 anti-Airbnb law marks a significant shift in the short-term rental market in France. While the new regulations impose stricter controls, they also open up interesting opportunities for professional renters and investors. Non-tight areas, often located on the outskirts of major cities, appear to be high-growth markets, with fewer legal restrictions and growing tourist demand.
For professionals in the sector, adapting to new fiscal, energy, and regulatory standards will be crucial to maintaining profitability. However, those who can adjust to these changes will find numerous opportunities in small and medium-sized towns, where restrictions are less stringent, providing a favorable environment for short-term rental development.
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