The French government is taking steps to address the housing market shortages. One of their approaches is tightening regulations on short-term rentals.
To provide clarity, I thought we’d dive into the changes today and ensure everyone understands what’s happening.
In essence, there are a few changes that is supposed to come with this new law starting January 2025.
Proof of Primary Residence
Landlords must demonstrate that the property being rented is their primary residence. This involves registering the property through a national online service and submitting tax documentation (specifically their tax notice) showing the property address.
New Fiscal Deduction Rates
Effective for rental income from January 1, 2025, the fiscal deduction rates are adjusted as follows:
- Classified properties and guest rooms: A 50% tax deduction is available for annual rental income up to €77,700 (down from the previous 71% deduction on income up to €188,700).
- Non-classified properties: A 30% tax deduction is applied for annual rental income up to €15,000 (down from the previous 50% deduction on income up to €77,700).
These changes aim to enhance local authorities' ability to regulate and align the fiscal treatment of tourist rentals more closely with their economic and environmental impacts.
Energy Performance Diagnostic (DPE) Requirements for Short-Term Rentals
As part of the new regulations outlined in the November 19, 2024 law, stricter Energy Performance Diagnostic (DPE)requirements will apply to short-term rentals (furnished tourist properties) in France, particularly in designated tense areas where change-of-use authorizations are required.
DPE Classification Deadlines
Properties must meet specific energy efficiency standards based on the following timeline:
- 2025: Minimum rating of F.
- 2028: Minimum rating of E.
- 2034: Minimum rating of D or higher (for all current and future short-term rentals).
This requirement applies exclusively to properties in metropolitan France.
Obligations for Property Owners
- Owners must provide a valid DPE certificate when requested by the local mayor.
- If the owner fails to submit the DPE within two months, they face:
- An administrative penalty of €100 per day, recoverable by the municipality.
- Renting a property that does not meet the minimum energy standards could result in:
- An administrative fine of up to €5,000 per property.
Compliance Timeline
Owners have 10 years to bring properties into compliance under the 2021 Climate and Resilience Law. This gradual implementation aligns with France’s broader goals of improving housing energy efficiency.
The new regulations aim to encourage sustainability in the tourism rental market while giving local authorities stronger oversight.
Expanded Powers for Mayors: New Short-Term Rental Rules
As of 2025, mayors in France will have greater authority to regulate short-term rentals in their municipalities. Here are the main changes:
Quota and Zoning Restrictions
- Municipalities can establish quotas for short-term rental permits.
- They can reserve areas in their Local Urban Plan (PLU) for the construction of primary residences, aiming to manage the balance between housing for residents and tourism.
Reduced Rental Period
- The maximum number of days a primary residence can be rented out to tourists will be reduced from 120 days to 90 days per year.
- Civil fines of €15,000 will apply for exceeding the authorized rental period.
New Administrative Fines
- A €10,000 fine for failure to register a short-term rental.
- A €20,000 fine for providing false registration information or using a fraudulent registration number.
Wider Scope for Usage Regulation
- Municipalities with a change-of-use regulation can apply it to non-residential properties, further expanding their ability to control short-term rental activities.
Changes to Co-Ownership Rules
- Owners who declare a property as a short-term rental must inform the property management syndicate.
- New co-ownership agreements may explicitly allow or prohibit short-term rentals.
- In existing buildings, co-owners can vote to amend regulations to ban short-term rentals, now requiring only a two-thirds majority (instead of unanimity).
These measures aim to address housing shortages and mitigate the impact of short-term rentals on local communities, particularly in tourism-heavy areas.
Have a great week!
Emil owner at Monsieur Folke