Rental Income Tax in France – What You Need to Know as a Holiday Home Owner

💰🏠📜 Rental Income Tax for Your Holiday Home in France – Impôt sur les Revenus Locatifs

If you rent out your holiday home in France, you are required to pay tax on your rental income. This tax, known as Impôt sur les revenus locatifs, must be declared to the French tax authorities, regardless of whether you live in France or abroad.

By registering your property and declaring your rental income, you can choose between two tax regimes, each offering potential tax advantages.

1. Micro-BIC Regime

✅ Who is it for? Rental income below €77,700 per year.
💶💰Benefits:

50% tax deduction on taxable income.
71% deduction if your property is classified as meublé de tourisme.
No need to declare expenses—you only pay tax on half of your income.

✅ Best for: Owners with low maintenance and management costs.
⏳ Fixed term: 3 years before you can switch regimes.

2. Régime Réel

✅ Who is it for?

Mandatory for rental income above €77,700 per year.
Optional for owners with high expenses who want to reduce taxable income.

📑💰 Benefits – Deduct actual costs, such as:

- Maintenance
- Loan interest
- Insurance
- Depreciation
You pay tax only on your net rental income (after deductions).

✅ Best for: Owners with high expenses looking to lower their taxable profits.
⏳ Fixed term: 1 year before you can switch regimes.

💡 Key Facts

🌍⚖️💰 Double Taxation Agreement

France has double taxation agreements with many countries, including the UK and the Netherlands.
Rental income is taxed in France, but you may still need to declare it in your home country.
Due to tax treaties, you won’t pay tax twice, but you must report the income correctly.

🏦💳🌍 French or Foreign Bank Account

Regardless of where your rental income is paid (French or foreign bank account), rental tax must be declared in France since the property is located there.

🔍📡🌎 International Tax Data Exchange

Financial institutions share tax data internationally under the CRS (Common Reporting Standard).
If your rental property is not registered and undeclared, you could face back taxes and penalties.

📖📚💻 Useful Articles on French Rental Income Tax (in English)

🔗💻🏛️ Declare Your Rental Income

You can declare your rental income via the official French tax website:
🔗 impots.gouv.fr

Ensuring compliance with French tax laws helps you avoid penalties and allows you to maximize potential tax benefits. A correct tax declaration also provides legal protection and peace of mind.