A French court confirms a restrictive interpretation of the tax allowance available to chambres d’hôtes owners.
Last week, France’s Supreme Administrative Court (Conseil d'Etat) issued a ruling that will reduce the incomes of thousands of small chambres d’hôtes businesses across the country.
By upholding the tax authority’s interpretation of the law, the court definitively excluded chambres d’hôtes from the higher tax allowance available under the ‘micro-BIC’ tax regime, classifying them instead as a standard furnished rentals activity.
Background
Until 2025 chambres d’hôtes operators could benefit from a higher ‘micro-BIC’ turnover threshold of €188,700 and a 71% tax allowance for income tax calculations.
For many owners in a rural area, where incomes are generally modest, the higher allowance enabled many to earn a reasonable living from their business.
However, in 2024 an ‘anti-Airbnb’ law was passed which reduced the ‘micro’ tax allowance for furnished lettings to 50%, and capping the maximum turnover to €77,000.
Legal uncertainty persisted regarding the scope of this legislation, prompting a challenge before the Conseil d’État.
Ruling
In a ruling on an appeal against a ministerial response from May 2025, the Conseil d’État validated the tax authority’s position: chambres d’hôtes must now be classified as furnished rentals (locations meublées) rather than parahotel (parahôtellerie) activities.
The immediate consequence is a drastic reduction in their turnover threshold to the standard micro-BIC ceiling of €77,700, with the tax allowance slashed to 50%.
The Council of State relied on parliamentary debates and the wording of Article 50-0 of the French General Tax Code (CGI), which explicitly excludes locations meublées from the favorable regime, an assimilation is that many critics consider is debatable: chambres d’hôtes differ from standard furnished rentals by offering additional services (such as breakfast and personalised hospitality), aligning them more closely with the hotel industry than with simple rentals.
The ruling of the court highlights ongoing confusion and conflict in the laws. Article 50-0 of the CGI mentions “furnished tourist accommodation” but paradoxically excludes guesthouses from this category while assimilating them to furnished rentals. “The law is very poorly drafted and mixes everything up,” criticises Paul Devaux, tax law specialist, who points out that the tourism code and the tax code do not share the same definitions.
Thus, on the income tax return form, chambres d’hôtes are classified under the same heading as non-professional furnished rentals (LMNP), even though administrative doctrine elsewhere recognizes them as parahotel activities.
This ambiguity is reflected in the Bulletin Officiel des Impôts (BOI), which sometimes classifies guesthouses as furnished rentals and sometimes as parahotel activities, depending on the section.
With the allowance cut to 50% (from 71%), income tax automatically increases.
That may be enough to persuade many chambres d’hôtes owners that they need to change their tax regime to profit and loss accounting (régime réel), which requires that detailed accounting records be maintained, and (normally) the appointment of an accountant.
Nevertheless, although the accounting requirements are substantial, the use of profit and loss accounting can often result in a lower tax bill.
For others, whose income tax bill may be small, it may be preferable to do nothing, and accept the bitter pill of paying slightly more in taxes.
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