Income resulting from the rental of furnished premises which you own, as well as those from the subletting of furnished premises which you rent, are subject to income tax in the category of industrial and commercial profits (BIC).
Furnished rental is the provision of living quarters furnished with furniture when it includes all the furniture items essential for normal occupancy by the tenant (decree no. 2015-981 of 31/07/2015).
The activity of furnished rental company is carried out on a professional when the following two conditions are met (article 155, IV of the general tax code):
- the annual income derived from this activity by all members of the tax household exceeds 23,000 €;
- the receipts exceed the income of the tax household subject to income tax in the categories of salaries and wages within the meaning of article 79 of the CGI (including pensions and life annuities as well as the income of the managers and partners mentioned in article 62 of the CGI), industrial and commercial profits other than those derived from the furnished rental activity, agricultural profits and non-commercial profits.
The professional or non-professional character of the furnished rental is assessed at the level of the tax household and applies to all furnished rentals of the tax household.
Your income tax declarative obligations
In order to be able to declare your income from furnished rentals, you must file declaration no. 2042-C-PRO, complementary to your tax return (no. 2042). The lines indicated in the developments that follow are therefore found on the 2042-C PRO declaration.
Your obligations depend on the tax regime of your activity.
Under the micro scheme
The micro scheme applies when the amount of your income for the previous year or the year before last does not exceed:
- €72,600 for rentals of furnished residential premises;
- €176,200 for rentals of classified guest rooms and furnished tourist accommodation.
If you are a non-professional furnished rental :
- indicate lines 5ND, 5OD or 5PD the total amount of the sums you have collected (rent, charges invoiced to the tenant and provisions for charges) for your rentals excluding the rental of guest rooms and furnished tourism. A fixed abatement of 50% (with a minimum of €305), representative of charges, will be automatically applied;
- indicate the total amount of your income from the rental of classified tourist accommodation or guest rooms, lines 5NG, 5OG, 5PG. A fixed reduction of 71% (with a minimum of €305) will be applied.
Note : if your income from furnished rentals has already been subject to social security contributions by social security agencies, declare the amount of your income on lines 5NW to 5PJ in the general case or lines 5NJ to 5 PJ for guest rooms and tourist accommodation. Thus, the corresponding income will not be subject to social security contributions by the DGFiP.
If you are a professional furnished rental company, indicate the amount of the sums collected line 5KP to 5MP.
In the real regime
If your activity is taxed according to the real regime, you must submit for each of your financial years, a package n°2031 to the business tax services (SIE) which manages the geographical location of the furnished accommodation if you do not have only one furnished rental property or, if you have several properties, on which depends either your main residence or your most important furnished accommodation.
In addition, when filing your income tax return, if you are a non-professional furnished rental company :
- if you are a member of an approved management organization and you use the services of an approved professional accountant known as a “visor “, indicate the amount of your profit calculated on your declaration n°2031 boxes 5NA, 5OA or 5PA, or boxes 5EY, 5FY or 5GY (income from foreign sources with tax credit equal to French tax);
- if you are not a member of an approved management organization and you do not use the services of an approved professional accountant known as a “visor” indicate the amount of your profit in boxes 5NK, 5OK or 5PK , or boxes 5EZ, 5FZ or 5GZ (income from foreign sources with tax credit equal to French tax).
Indicate the amount of deficits for the year boxes 5NY to 5PZ. Indicate boxes 5GA to 5GJ the amount not yet imputed of the deficits of non-professional furnished rentals from previous years.
If your income from furnished rentals has already been subject to social contributions by social bodies, declare the amount of your profit lines 5NM to 5MM. Thus, the corresponding income will not be subject to social security contributions by the DGFiP. Indicate the deficits for the year relating to social security bodies lines 5 WE to 5 YF.
The household’s deficits resulting from the activity of non-professional furnished rental property can only be set off against income from the same activity over the following ten years.
These deficits are not deducted from overall income, income from other commercial activities carried out on a non-professional basis or profits generated by the furnished rental activity carried out on a professional basis.
If you are a professional furnished rental company, indicate the amount of your profit calculated on your declaration n° 2031 boxes 5KC, 5LC or 5MC, or boxes 5DF, 5EF or 5FF (income from foreign sources with tax credit equal to the tax French) ; or if you are not a member of an approved management organization or if you do not use an approved professional accountant known as a “visor”, indicate the amount of your profit in boxes 5KI, 5LI or 5MI, or boxes 5DG, 5EG or 5FG (income from foreign sources with tax credit equal to French tax).
Income from non-professional furnished rentals, declared according to the micro regime or according to the real regime, will automatically be subject to social security contributions, in the event that they have not already been subject to social security contributions by social bodies (see previous remarks) . Do not report them in the “Income to be taxed on social contributions” section of the 2042-C-PRO.
Other obligations
As a furnished rental company, professional or non-professional, you must complete certain procedures (obtaining a SIRET number, etc.) and are liable for the Contribution Foncière des Entreprises (CFE). Depending on the situation, you may also be liable for the business value added contribution (CVAE) and VAT.
Bed and Breakfast and Classified Tourism.
Furnished rental activities are considered as services to determine their tax regime. For the taxation of income for the year 2021, when the income for the year 2020 or the year 2019 did not exceed €72,600, the activity falls under the micro regime and a flat-rate allowance of 50% is applied to the amount of revenue for the year 2021 to determine the taxable profit.
On the other hand, the rental activities of classified tourist accommodation and bed and breakfasts are subject to the limits applicable to the activities of sale and supply of accommodation. When the receipts for the year 2020 or the year 2019 have not exceeded €176,200, the activity falls under the micro regime and benefits from a reduction of 71%. Beyond that, the activity comes under the real regime.
Rural lodgings must be classified as furnished accommodation to benefit from the threshold of €176,200 and the 71% reduction.
You must take steps to benefit from these designations.
For the rented property to be qualified as “furnished tourist accommodation”, you must submit a specific declaration to the town hall of its location. This step is mandatory. For some municipalities, you must obtain prior authorization from your town hall. See the website of the Directorate General for Enterprises http://www.entreprises.gouv.fr/tourisme/meubles-tourisme.
Similarly, for the rented property to be qualified as a “guest room”, you must submit a specific declaration to the town hall of its location. This step is mandatory. See the site of the Directorate General for Enterprises http://www.entreprises.gouv.fr/tourisme/chambres-d-hotes.