Furnished rental for the tenant’s main residence is more closely regulated through the ALUR law

With the ALUR law, furnished rental as the main residence of the tenant is now more regulated but it however keeps the necessary flexibility regards to the duration of the lease, the amount of the security deposit or the choice of fixed charges. And most importantly, the advantageous tax regulation remains untouched. Here the 7 points that sum up the essential information.
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The income induced by furnished rental is part of the industrial and commercial profits (BIC)

During the reporting of land income, it is frequent that the lessors property owners mistakenly report their income induced by furnished rental in the land income category (valid for empty rental), whereas this income are recognized as industrial and commercial profits (BIC), most often more advantageous to the owner. Indeed, may he benefit from micro BIC tax regime with 50 % of lump-sum allowance or from the normal regime , the property lessor of a furnished property usually benefits from it.
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How to determine the rent for a furnished rental?

How to determine the rent for a furnished rental?

The rent of a furnished housing can be freely determined by the landlord as long as he takes into account the property’s location and the furniture quality. The ALUR law provides for rent regulation for furnished rentals when it is the tenant’s main residence but the implementation decrees haven’t been issued yet. If a landlord wants to rent out its property he will have to determine the rent accordingly with different criteria…

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The incomes generated by empty rental are land incomes

The property owners that rent their empty or bare properties, that is not furnished, must report their income in the land income category (in opposition to the furnished rental incomes that belong to the industrial and commercial profits – BIC category).
It is essential to differentiate in the land income category the micro-property tax regime that provides a lump-sum allowance of 30 % from the actual tax regime that allows to deduce charges for their real and justified amount, as well as to know that you can pass from tax regime to another under certain circumstances.

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Furnished or empty, the rented housing must be decent

Furnished or empty, the rented housing must be decent

In furnished rental as in empty rental, the lessors must deliver a decent housing, under he risk of being condemned to upgrade it to the standards or to have their rent reduced by the judge. But what is decent housing? The 30th January 2002 decree n° 2002-120 defines it as an accommodation that does not pose any apparent risk to the physical security or the health of its tenants and that presents elements making it compliant to the use.
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Rental income: land income or industrial and commercial profits (BIC)?

What is the tax regime for incomes generated by the rental of real estate properties?

It is essential to distinguish the land from the industrial and commercial income. Indeed, even though both correspond to earnings generated by the rental of real estate properties, empty or bare rental incomes are land incomes whereas furnished rental incomes are industrial and commercial profits (BIC).
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About me

Maud Velter
Maud Velter
Legal & practical advice for furnished rentals
Associate Director of Jedeclaremonmeuble.com