VAT, direct taxes, formalities... What will be the tax bill for your seasonal rental?

Renting a room for a weekend or for the holidays has become very easy since the rise of platforms like Airbnb.

The legislator nevertheless imposes on taxpayers who devote themselves to furnished rentals to declare the income they derive from it. How will this translate for tax purposes? We take stock.

A professional activity…

"If you carry out this activity frequently, your income is assimilated to professional income", explains Aurélien Bortolotti, lawyer specializing in real estate taxation. The way to rent a property and to organize remains important, this assessment should therefore always be made in the context of concrete facts.

If you rent one or more spaces on a frequent basis, ancillary services offered or not, the income resulting from this activity will be taxed as professional income.

However, it is not possible to establish a realistic projection of these receipts, which are calculated on a case-by-case basis. "These incomes are subject to progressive rates of up to 50%, plus municipal taxes which often amount to between 6 and 8% (with famous exceptions at 0%). These incomes are aggregated with other professional income. costs, the actual costs are in principle deductible. Most taxpayers nevertheless choose to apply the flat rate, limited to 5,040 euros for income in 2022., explains Thomas Gernay, lawyer specializing in tax law at Simont Braun. Qualification as professional income should nevertheless remain an exception in most cases.

… or not

If you carry out this activity punctually, the income will be considered as coming from three sources: the rental of the room, the rental of furniture and additional services such as breakfast, cleaning, etc.

These three sources of income correspond to three categories of tax:

  • Real estate income (for the rental of your room), which will be taxed at progressive rates up to 50% on the indexed cadastral income, increased by 40%;
  • Movable income (for the rental of furniture): in the absence of a breakdown in your rental contract, 40% of the income represents this rental. A flat rate of 50% applies. On this difference, the amount of tax will be 30%;
  • Miscellaneous incomewhich will be taxed at 33%.

Examples

"Let's take the example of an owner who rents out a room with a kitchen available, the proportion of the cadastral income of this room is evaluated at 300 euros. His rentals bring him 250 euros monthly", explains Aurélien Bortolotti:

  • For real estate income, the room will be taxed on the basis of the cadastral income increased by 40%et not on the rent received. The calculation will therefore be as follows: 300 euros x 1.9084 (coefficient linked to consumer price indices) x 1.4 (cadastral income + 40%) = 801.53 euros. On this amount, the tax is progressive in installments. We should therefore be around 50%or the sum of 400,76 euros.
  • For movable incomeif it is a furnished taxation, a separate taxation will be operated at 30% and a flat fee of 50% will be deducted. A breakdown must be provided for in the rental contract, in order to be correctly taxed.. By default, the distribution would be 60% for the building and 40% for the furniture. This distribution recorded in the rental contract (80%/20%) will give the following calculation: 3,000 euros (250 euros (rent) x 12 months) x 20% (- 50% of charges) = 300 euros, while the distribution default (60%/40%), will be [(3.000 x 40%) – 50% charges] = 600 euros. On this amount, the tax will amount to 30%, or the sum of 90 euros, or 180 euros.
  • The service delivery will represent 20% of the rental price (in the example below). Income from ancillary services, such as cleaning, is taxed at 33%. The calculation will then be as follows: [(3.000 euros x 20%) – 500 euros (assurance, énergie, entretien, commission booking, …)] = 100 euro. On this amount, the tax will amount to 33%, or the sum of 33 euros.

What about VAT?

You do not offer additional services:

The application of the VAT regime will not apply if you do not offer any of the ancillary services mentioned in the circular effective since July 1, 2022.

The application of the VAT regime will not apply if you do not offer any of the ancillary services mentioned in the circular of July 1, 2022.

Indeed, from this date, the supply of furnished accommodation, for a period of less than three monthsis subject to VAT of 6%, unless these establishments do not render any of the following related services: ensure the physical reception of guests, the provision of household linen and, when furnished accommodation is provided for a period of more than one week, the replacement of this household linen at least once a week and the supply daily breakfast, by the operator of the accommodation or by a third party on his behalf.

You offer additional services:

If you offer at least one of these additional services, your rental income will be subject to VAT. "You will need to identify yourself for VAT, return the annual list of taxable persons who have visited you. You will then have to apply a VAT rate - 6% - on your rentals and you will be required to make periodic declarations. In return, you can deduct the VAT", concludes Aurélien Bortolotti.

Collaborative economy or traditional regime?

A specific regime for the collaborative economy is provided for incomes of up to 6,540 euros per year (2022 amount). In terms of income tax, income benefiting from this regime is taxed at 20%, and deductible expenses are determined on a flat-rate basis at 50%. With regard to VAT, there is an exemption from VAT up to the same amount of 6,540 euros.

This regime is reserved for digital platforms approved by the FPS Economy. "To date, neither Airbnb, nor Booking, nor any platform has been approved by the FPS Economy", explains Thomas Gernay, lawyer specializing in tax law at Simont Braun. If you go through these portals, this regime will therefore not (yet) apply (neither for income tax nor for VAT). Be careful however, the platforms are now subject to information obligations towards the tax authorities. It is therefore important to declare this income.

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