Although the taxe d’habitation (local rates) on principal residences was finally abolished in 2023, the tax remains payable on second homes.
For this purpose the tax is called the Taxe d'habitation sur les résidences secondaires (THRS).
The THRS applies to all furnished properties not used as a primary residence, including furnished rental properties subject to the local business rates, the Cotisation foncière des entreprises (CFE).
As a result, landlords of furnished lettings are sometimes liable for both the THRS and the CFE.
In areas of housing shortage, some municipalities are granted the right to impose a surtax on the THRS, which in many cases can be up to 60% of the base tax.
However, in the recent budget passed by the French Parliament, the government granted exemption to the THRS for rural gîtes (gîtes ruraux), subject to strict cumulative conditions.
To qualify:
The property must be either a detached house or an apartment located in a building containing no more than four dwellings. As a result, large apartment blocks are excluded.
The property must not be located within the territory of a “metropole’. In practical terms, major urban areas such as Lyon, Bordeaux, Lille, or Toulouse are excluded from the scheme.
Additionally, the property must comply with an officially recognised quality label approved by the State and be subject to regular inspections. A forthcoming decree will specify these criteria.
This definition clearly aims to distinguish traditional rural gîtes from urban short-term rentals operating via digital platforms such as Airbnb. The legal term for both is meublés de tourisme.
Until now, only municipalities located in designated rural regeneration zones could decide to exempt classified furnished tourist accommodation from the THRS.
The 2026 Finance Law extends this right to all municipalities and inter-municipal councils across the country, excluding metropolitan areas.
Where previously local authorities in designated areas had the power to grant exemption, now the exemption is granted automatically.
In addition to this change, landlords will no longer be required to make an annual filing to benefit from the exemption, thereby simplifying administrative procedures.
The details of the new arrangements are to be set out in a decree, notably those relating to the quality rating to apply.
A suivre.
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