Tax obligations for non-residents renting out furnished accommodations

If you are renting out furnished accommodations

Income earned from renting out furnished accommodations that you own, or from subletting furnished accommodations that you rent, is taxable as business profit (bénéfices industriels et commerciaux, or BIC).

You must declare this income on supplementary return 2042-C-PRO in one of these sections:

- Revenus industriels et commerciaux professionnels (professional business profits)

- Revenus des locations meublées non professionnelles (non-professional letting of furnished property)

When is the activity of renting out furnished accommodation considered profesional or non-professional?

The activity of renting out furnished accommodations is considered professional when the following two conditions are met:

- The annual revenue generated by this activity by all members of the taxable household is greater than €23,000.

- This revenue is greater than the revenue of the taxable household that is subject to income tax in the categories of wages and salaries within the meaning of Article 79 of the General Tax Code (including pensions and annuities as well as revenue of managers and partners as set out in Article 62 of the General Tax Code), and the categories of business profits (other than that earned from the letting of furnished accommodation), agricultural profits and non-commercial profits.

In the event that one of these conditions is not met, the activity of renting out furnished accommodation is considered non-professional.

How to file

Professional letting of furnished accommodations

You must file return no. 2042-C-PRO, to be completed based on the applicable regime:

- If you are subject to the micro-enterprise regime, you will need to indicate your gross revenue (professional letting of furnished accommodations) on lines 5KP to 5MP.

A 50% fixed allowance for service charges is applied automatically. This allowance is 71% for renting out furnished tourist accommodation, rural guesthouses or bed and breakfast establishments, in which case you need to fill out lines 5KO to 5MO.

- If you are subject to the actual tax regime, you will need to indicate on return no. 2042-C-PRO the taxable income determined on form no. 2031, filed with:

the Business Tax Department (SIE) associated with the furnished property, if it is the only one you are renting out
the SIE associated with your largest furnished property, if you are renting out several

Profits from the professional letting of furnished accommodations must be declared on lines 5KC to 5MI (profits) or 5KF to 5ML (losses).

Non-professional letting of furnished accommodations

You must file return no. 2042-C-PRO:

- If you are subject to the micro-enterprise regime, you will need to indicate the total amount of revenue collected on lines 5ND to 5PD.

- If you are subject to the actual tax regime, you will need to indicate on return no. 2042-C-PRO the taxable income determined on form no. 2031, filed with:

the Business Tax Department (SIE) associated with the furnished property, if it is the only one you are renting out
the SIE associated with your largest furnished property, if you are renting out several

Profits from the non-professional letting of furnished accommodations must be declared on lines 5NA to 5PK (profits) or 5NY to 5PZ (losses).

Notes

1. On return no. 2042-C-PRO: the boxes marked “durée de l’exercice” (duration of tax year) only need to be completed if your furnished accommodation rental activity is new or if the applicable tax year is less than 12 months (e.g. if you are changing the year-end closing date).

This does not apply to seasonal business activity, even if you only generate revenue for a portion of the year.

Be careful: If you incorrectly fill out these boxes, the amount of income tax owing will be correctly calculated but the amount of your advance income tax instalments will be too high.

To change the amount of your tax instalments, if it is still before the filing deadline, you can file an amended return and delete what you had entered in the “durée de l’exercice” boxes on form no. 2042-C-PRO. This will ensure the amount of your instalments is quickly corrected.

Otherwise, you will need to send an amended return by post to : Service des Impôts des Particuliers Non-Résidents, 10 Rue du Centre, TSA 10010, 93 465 Noisy-Le-Grand Cedex.

2. If you are leaving or returning to France

For the year in which you leave France, the amount of your income received after your departure and up to 31 December must be declared on return no. 2042-NR.

For the year in which you return to France, the amount of your income received from 1 January to the date of your return must be declared on return no. 2042-NR.

For other years, whether you are a resident or non-resident of France, you will use the standard 2042 return.

A new reporting requirement for property owners

As from 2023, all property owners will be required to file a declaration with the French tax authorities by 1 July for each property that they own. They will be asked to report the type of residence (main or second) and, if they are not currently living in it, to provide the name of the occupant(s) and the period of occupancy. The declaration must be filed via the “Gérer Mes Biens Immobiliers” (Manage my properties) section in your personal account.

For further information, go to the Gérer mes biens immobiliers: a new online service for property owners section of the impots.gouv.fr website.

UPDATED DINR-PART on MAY 15, 2024