Definition of short-term rental :
Short-term rental refers to the rental of furnished accommodation for a period ranging from one night to several months. It is aimed at people who are “passing through” and who do not make their home permanently.
Short-term rental is an alternative to traditional hotels or standard property rentals. It is aimed at professionals on business trips, tourists on holiday, or people in a period of transition (moving house, for example).
The short-term rental market in France
Also known as seasonal rental, this form of rental between individuals has been very successful in recent years! This craze can be explained by the success of online rental search platforms such as AirBnB. And by the undeniable tourist appeal of France. Both locally and internationally. Unsurprisingly, France occupies the 2nd place on the podium of the short-term rental market, behind the United States! (source: Les Echos)
With more attractive rates than traditional hotels, a wide variety of accommodation types and now concierge services, short-term rentals are increasingly appealing to travellers, whatever their type of stay.
The legal framework for short-term rental
Short-term rental is subject to very specific regulations. It is the letting of a furnished property for a maximum and non-renewable period. In accordance with the Hoguet law of 2 January 1970, the duration of a seasonal rental cannot exceed 90 days. However, for towns with more than 200,000 inhabitants and municipalities located in the 92, 93 or 94 departments, the maximum duration is set at 120 days per year!
Short-term rental is not subject to the same rules depending on the type of residence:
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Primary residence
As the owner of a principal residence, the lessor can rent out his property for up to 90 to 120 days per year without having to take any particular steps, except possibly a declaration to the town hall. It is possible to rent out the main residence beyond this limit if :
– the owner can prove an absence of more than 4 months in the year for health reasons, professional reasons or force majeure.
– the owner rents out a private room in his/her main residence; bed and breakfast accommodation is not subject to the 120-day limit.
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Secondary residence
A secondary residence is any dwelling occupied for less than 8 months per year. The landlord of a secondary residence may, in the context of short-term rental, rent out his property by requesting a change of use. Within the framework of a commercial activity, the dwelling is then considered as commercial premises.
A very specific tax system
In the context of short-term rental, the property rented is then a furnished rental. From a tax point of view, the rents and charges received in the context of a seasonal rental are taxed in the category of industrial and commercial profits (known as the BIC regime) or according to the actual regime.
Whether it is for your main or secondary residence, you can choose between non-professional furnished rental (LMNP) or professional furnished rental (LMP). Explanations:
“Location meublée non professionnelle” (LMNP)
- Your rental income must not exceed €23,0000
- You must choose a tax regime for your declaration. Depending on your situation, you have two possible tax regimes, real or micro-BIC
“Location en meublé professionnel” (LMP) :
If you do choose this option:
- Your rental income must exceed €23,0000
- The rental income must represent more than 50% of the income of your tax household.
- You must declare the start of your activity using the Cerfa P0i form, i.e. the Cerfa form numbered 11921, and send it to the Centre des Finances Publiques where your property is located within 15 days of the start of your activity. However, it is not necessary to register with the Centre des Formalités des Entreprises, as the taxpayer is not subject to social security contributions” (source: www.lmnp-loueur-meuble-non-professionnel.fr)
Short-term rental: expenses to be taken into account
You may also be liable for the Cotisation Foncière d’Entreprise (CFE). This has replaced the business tax and applies to those renting out furnished accommodation that is not their personal residence (property dedicated exclusively to rental investment).
And the tourist tax. This may be collected from travellers (taxe de séjour au réel) or paid by the landlords who themselves pass it on to their clients. The purpose of this tax is to finance municipal expenses related to tourist traffic and the protection and maintenance of tourist areas. Its price varies from 0.2 to 4€/night/person. Depending on the type of accommodation and the host municipality. It is clearly displayed on the premises (at the landlord’s or accommodation owner’s, in the hotel) and must be included on the bill paid by the traveller.
In addition, as a landlord you must pay the operating costs of the rented property, such as condominium charges, heating, electricity, water, internet, insurance, property tax, etc.
If this seems like a lot of work, consider rental management. There are professionals in the business who can support you in the short-term rental business and advise you. Mana Homes will give you a different perspective on renting!
The profitability of short-term rental
The rental profitability is particularly interesting for short-term rentals. Provided you choose your status and management method for the rental income received, as explained above.
What are the advantages of choosing short-term rental?
– The rent/night is usually higher than a monthly or annual rent
– The risk of non-payment or late payment is almost zero thanks to the online platforms on which to pay.
– With short-term rentals, the property is cleaned and maintained more regularly than with a “classic” rental
– In the case of a loan taken out to finance your property, renting it out allows you to gradually recover the money needed for repayment
– Attractive taxation
Short-term rental: professional help
Renting out your property for seasonal rental is made easier by the platforms. But the day-to-day management requires time and availability. Even more so when you are at a distance. Why call on a professional for the rental management of your property? This expert in property rental management for short term rental takes care of all the tasks related to the rental on behalf of a landlord. At Mana Homes, this expertise is recognised in three important areas of property management: marketing, operations management and concierge services.
Want to know more about the services related to rental management? We have listed 6 reasons why you should choose this option for your short term rental property!
Mana Homes, a leading provider of exceptional short term rental accommodation, has listed 6 reasons to convince you to opt for rental management. Discover them below and free yourself from your obligations!