Are you thinking about renting out a Paris apartment?
The regulations governing the real estate market in our capital are a minefield, with many gray areas, especially when it comes to short-term rentals.
So here is our guide to renting out your apartment in Paris, making it cost-effective and most importantly, compliant with the current French legislation.
The advent of Airbnb and ‘micro’ rentals
Around a decade ago, new websites started to change the short-term rental landscape in many cities around the world.
Although there are others, Airbnb, the American-based online rental marketplace, remains the king.
But the use of these sites in Paris has always been controversial. The capital has concerns about the reduced availability of residential property for those wishing to live and work here full time.
Secondly, the rise of ‘micro’ vacation rentals has impacted the hotel industry, something Paris is internationally famous for. Before Airbnb, it was estimated that 20,000 people rented an apartment short term. With the advent of Airbnb that figure climbed to 70,000 apartments.
Many suggest that 80% of owners do not declare their rental income when using these online sites.
The use of Airbnb in Paris has generated a few lawsuits in recent years, something we previously covered in this blog.
Making a positive case for short-term rentals
Is it all negative though?
Some may argue that short-term rentals have potential benefits for Paris.
This includes homeowners who require a rental income to help finance their property purchases in the capital, often significant ones at that.
And of course, there is the tourism industry, which contributes a total of 198.3 billion Euros to the GDP in France.
Without quick and easy short stay online rentals, tourists may be less likely to visit Paris, or could visit less often.
Restrictions on renting out a Paris apartment
If you are planning to list your apartment online for a short-term rental, there are some basic points to consider.
In Paris, you are only permitted to let your apartment short term if the property is your primary residence. And this for a maximum of 120 days a year.
Longer than this and your venture is a ‘business’ in the eyes of French law. This makes it subject to additional regulations and tax.
Secondary residences require commercial zoning to rent out short term, which can be expensive and time consuming to obtain. But the fines for not complying are even more so, with a penalty of €50,000 per offense.
When using a rental website, there are additional rules to follow. This includes registering your property with the local Mairie (Town Hall) to obtain a registration number. You must then cite this on your online listing.
On the other hand, longer-term rentals of a year or more will often make you subject to stringent rent control laws, not to mention potential obstacles when trying to get the apartment back from your tenant.
The final certainty, taxes
A further topic to consider is the tax implications for owners renting their property.
In most cases, tax is due when earning more than €5,000 a year from your rental.
If your rental income exceeds €23,000 each year from a furnished apartment, it may be possible to earn the status of a Loueur en Meublé Professionnel (professional renter of furnished property).
When meeting further conditions on top of this, LMPs can claim tax benefits, sometimes paying minimal tax on their earnings.
But everyone’s individual tax situation is different, and you should always seek guidance in this area. We are able to refer our clients to a trusted expert in this field for specific tax advice.
Assistance with renting out a Paris apartment
Clearly, this can be a complicated topic. If you would like to find about more about the best options for you when renting out a Paris apartment, we are here to help.
We have a highly-experienced team of property experts, who are on hand to provide free advice for owners.
Please do get in touch with us at 56Paris to see how we can assist you. We can help you realize the most lucrative option for your apartment while remaining within the law.
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All information given in this blog is current at the time of writing and is a guide only. At 56Paris, we always recommend consulting a tax professional or an attorney for advice on your own situation.