Property tax: two MPs blame government for Airbnb giveaways

An amendment to the 2024 budget will extend the VAT exemption for rentals through Airbnb, Paris communist senator Yann Brossa and EELV deputy Julien Bayou said on Thursday, expressing dissatisfaction with the "gifts" given to the specialist in tourist furnished apartments.

Instead of regulating tourist furnishing, as demanded by parliamentarians and mayors of all destinations and all territories, the government used Article 49-3 to give two major gifts to Airbnb, Julien Bayou said in a statement, citing the extension of the VAT exemption and the consolidation of the tax exemption for Airbnb as examples.

On July 5, 2023, the Council of State acknowledged that the VAT exemption for furnished tourist rentals creates unfair competition for hotels, which is contrary to European directives, details outlined by Senator Jan Brossa.

The Ministry of Finance has chosen to create a legal ploy by extending the VAT exemption to hotels that do not provide para-hotel services (reception, breakfast, towels, regular room cleaning or three of the four criteria mentioned), a proposal that, according to Yann Bross, eliminates unfair competition but will have no effect since almost no hotel in France fits this definition.

According to the Ministry of Finance, it has acted in conjunction with tourism operators, including AToP, the association for professional tourism. The obligation to pay VAT implies the possibility of deducting this VAT, in particular for furnishing, which is ultimately an advantage, according to the Ministry of Finance, which clarifies: hotel professionals are well aware that the problem is not to grant the right of deduction to tenants of furnished apartments.

Another change in the draft budget for 2024 aims to reduce the tax advantage currently enjoyed by tourist furnished apartments such as Airbnb, Abritel or Booking, reducing the tax deduction from 71% to 50%. But according to Julien Bayou, this only affects an extremely small portion of Airbnb rentals, even in busy neighborhoods.

According to the Treasury Department, there are currently 500,000 non-professional furnished apartments that fall under the 50% tax deduction and 100,000 classified tourist accommodations that have a 71% tax deduction. Airbnb's furnished apartment federation, the National Union for the Promotion of Vacation Rentals (UNPLV) opposes the cut, estimating in a statement that a significant reduction in the forfeit rate would be a severe blow to the purchasing power of many small owners in the face of rising prices. Authorities are frozen about the change, believing it could threaten business activity and employment in their territories.

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