Owners of furnished tourist accommodation in France (location meublée de tourisme) won't have missed the publication of the new provisions of the "Le Meur" law, also known as the "anti-Airbnb" law, of 19 November 2024, the purpose of which is to provide a stricter framework for this type of rental.
While the immediate consequences of these new provisions are severe for landlords, the objective of revitalising the residential rental sector is commendable one.
There are three mains components to the new regime:
- Less favourable taxation. With effect from 1st January 2025, the 'micro-BIC' tax allowances will be reduced. The 50% allowance for "non-certified" furnished tourist accommodation will be reduced to 30% (up to a limit of €15,000 of annual rental income). For "certified" furnished accommodation and bed and breakfast, the allowance will be reduced to 50% (compared with 71% today), up to a limit of €77,700.
- Extended powers for local authorities and new financial
penalties for non-compliance. The powers of local
authorities have been strengthened, imposing:
- Prior declaration to the mayor and/or prior authorisation to change the use of the premises, as the law has extended the scope of these measures to new municipalities.
- Respect of a limit of number of days if the property is the main residence (maximum of 120 days per calendar year, which can now be reduced to 90 days by decision of the local council).
- A more restrictive framework for co-ownerships. The co-ownership by-laws may now be amended to prohibit the rental of residential lots (other than those constituting a main residence) as furnished tourist accommodation (a majority of the members of the syndicate representing at least two-thirds of the votes is required).
In addition, all new co-ownership by-laws must expressly state whether the rental of furnished tourist accommodation is authorised or prohibited.
Lastly, any co-owner who has declared the rental of a furnished tourist accommodation must inform the syndic. The latter will then include information on the rental activity of furnished tourist accommodation within the co-ownership on the agenda for the next general meeting.
Owners of properties used for furnished tourist accommodation will therefore be well advised to review the adequacy of their property investment strategy in light of these new provisions.
What about furnished vacation rentals in the Principality of Monaco?
It should be noted that, to date, there are no regulations in the Principality comparable to those in France aimed at regulating the rental of furnished tourist accommodation.
However, other legal instruments may restrict this faculty, starting with the co-ownership by-laws or the building's internal regulations. It is therefore advisable to ensure, prior to any rental, that the regulations do not contain any stipulations restricting the use of the co-ownership lot concerned.
The landlords of furnished tourist accommodation, who in many cases in the Principality will themselves be a tenant sub-letting for short periods on a platform such as Airbnb, will also need to ensure that their lease does not prohibit sub-letting the premises or require them to obtain the prior agreement of their own landlord. If they fail to do so, they run the risk of having their lease terminated, in addition to any damages or penalties that may be sought by the landlord for failure to comply with the contractual stipulations.
The landlords of furnished tourist accommodation will also need to consider the tax treatment that may apply: although this activity is not subject to income tax in the Principality, it should nevertheless be subject to VAT, provided that the applicable conditions are met.
Owners of properties used for furnished tourist accommodation are therefore advised to ensure that their property investment strategy complies with any contractual and tax obligations they may have.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
