potential impact on Airbnb and short-term lets

MPs say they aim to make competition fairer between rentals and hotels

Many tourist rentals are not currently subject to VAT
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France could make people offering holiday rentals charge VAT if an amendment to the 2025 budget law is passed.

MPs on the Assemblée nationale’s finance committee voted in favour of the amendment last week and it is among amendments now set for debate by the full house.

If adopted into the final law, it would oblige owners to charge their guests VAT of 10% on stays, bringing them in line with hotels, which already have to charge VAT.

The amendment would form part of the 2025 budget law, originally presented by the government on October 10, which has an overall aim of reducing France’s soaring public deficit by making some €40 billion in savings and €20 billion in tax rises.

The budget law is currently being examined by the Assemblée nationale, where it will have to be approved before moving on to the Senate.

The proposed VAT change, if it remains in the final bill, will affect people who rent out properties for short-term lets, including via platforms such as Airbnb and Abritel.

The fact that it was approved by the finance committee indicates that a number of MPs are in favour of it, as does the fact that several different groups of MPs have resubmitted it to the full house. However, its final adoption is uncertain at this stage.

The wording of the change refers to meublés de tourisme (furnished holiday rentals), whether classified under the star-rating system or not. The definition used includes any short-term rental to a temporary guest, on a daily, weekly or monthly basis, or a whole house or flat for their exclusive use.

It does not include renting out a property as someone’s home or renting out a room in a house.

Furnished tourist accommodation is currently only subject to VAT if it provides three of the following: breakfast, regular cleaning, household linen or welcoming customers.

Many holiday rentals do not tick all these boxes, so do not have to charge VAT, a fact questioned by some MPs.

Horizons MP François Jolivet, who tabled the amendment at the finance commission stage, said tourist rentals were “purely commercial acts, which must therefore be subject to VAT”.

Charles de Courson, Liot MP for Les Centristes, said the change would create “fair competition” between tourist rentals and the hotel sector.

However, such a change could come as a blow to people who rent out accommodation, as it could make tourist rentals less attractive to guests.

It would also be an additional administrative complication and would come on top of recent tax law changes, which in many cases are set to increase taxation on the income from these rentals.

potential impact on Airbnb and short-term lets

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