Finance Bill 2023: What to expect for furnished rentals?

What should furniture rental companies expect in 2023? A priori, there is no significant change in the eye. As planned, micro-BIC mode thresholds will be re-evaluated from January 2023. In addition, in the current version, the financial bill for 2023 contains two articles on the accommodation of furnished tourists: the second one can no longer be exempted from VAT, and the taxpayer from three-furnished apartments will be subject to the real regime. .

On the energy renewal side, neither the amended financial law for 2022 nor the PLF 2023 provide for any special incentives for furnished rental companies, in contrast to what is provided for vacant rentals. Finally, since the Genesee-Bouvard scheme has not been extended, those wishing to take advantage of the tax deduction by investing in an assisted living facility must do so by December 31, 2022.

Mallory Boutron, Chartered Accountant graduate and Head of Tax at Jedéclaremonmeublé.com, details the changes to the Micro-Bic threshold for furnished rental companies and provides an update on the changes planned for PLF 2023 furnished tourist accommodation.

Micro-BIC thresholds have been raised to 1er January 2023

Rents received by furnished rental companies are taxed under the Industrial and Commercial Profits (BIC) category. To date, if the tax farm’s income from furnished rentals (including rent) is less than or equal to €72,600 (€176,200 for classified tourist accommodation), the default regime is micro BIC.

In this case, the taxpayer benefits from a flat rate of 50% (71% if his accommodation is classified as a “renovated tourist accommodation”). For example, if he receives €6,000 in rent, including fees, in a year, he will be taxed on half of this amount (let’s say 30%) and pay 17.2% social security, i.e. € tax. 1416 for the said year [(3000 x 30%) + (3000 x 17,2%)].

The General Tax Code provides that the thresholds of the micro-BIC are updated every 3 years at the same rate as the three-year evolution of the first bracket of the income tax scale, rounded to the nearest hundred euros. This review will take place on the 1ster January 2023. Taking into account the income tax revaluation for 2020, 2021 and 2023 (still to be approved), the new micro BIC threshold will be €77,700 for furnished rentals and €188,600 for furnished tourist accommodation.

Furnished tourist accommodation targeted by PLF 2023: VAT and mandatory real regime

In principle, furnished rentals are automatically exempt from VAT. However, under the General Tax Code, landlords are liable for VAT if, in addition to furnished accommodation, they offer at least three of the following para-hotel services: customer reception, breakfast service, regular cleaning of accommodation, supply of household linen . Article 5 of the PLF 2023 provides that the rental of tourist accommodation equipped with the possibility to benefit from the main franchise regime VAT is subject to VAT, even if 3 of the 4 para-hotel services mentioned above are not provided. annual turnover is less than €85,800). This is why all Airbnb-style rentals are uncomfortable.

Indeed, in the Tourism Code, tourist accommodation is defined as “daily, weekly or monthly rent intended for the exclusive use of the lessee, rented to temporary customers who do not live there.” There is no need to distinguish between classified and unclassified residence.

This is good news for furniture rental companies. VAT liability applies to the purchase price of a new home or the cost of work, maintenance or repair costs, accounting costs, etc. Allows you to recover VAT. If this obligation is unaffordable, the furnished lessor must choose the basic deductible amount (provided they have an annual rental income of less than €85,800). After that, the taxpayer is exempted from declaring and paying VAT. says Mallory Boutron, head of tax at jedéclaremonmeublé.com.

In addition, Article 9 of Quarter H of the PLF 2023 provides that taxpayers who rent at least three tourist accommodations (classified or not) as of January 1, 2023 will be excluded from the micro-BIC regime and, therefore, 50% fixed tariff allowance (71% if tourist accommodation is classified). These equipped rental companies will be subject to the de facto BIC regime.

Again, this is not bad news, the real regime saves more tax in 85% of cases. Indeed, it allows the taxpayer to deduct all expenses incurred (loan interest, maintenance and repair fees, property tax, insurance, management and accounting fees, etc.) and depreciate the value of the residential building (excluding the value of the land). , furniture and certain works. Acquisition costs can be expensed or amortizedAdds Mallory Boutron.

Energy renovation: no special incentives for furniture rental companies

In order to encourage non-renovated apartment renters to carry out energy renovation work, the amount of the property deficit on the taxpayer’s gross income is planned to be increased by amending the finance law for 2022 so that their apartments no longer have the status of a “thermal sieve”. From 2023 to 2025, income up to 21,400 euros (instead of 10,700 euros). The work carried out must enable the vacant rented accommodation to change from an E, F or G energy efficiency class to an A, B, C or D energy efficiency class no later than 31 December 2025 (proposal accepted by the taxpayer from 5 November, 2022 and the invoice was paid between 1er January 2023 and December 31, 2025).

Therefore, we are talking about doubling the limit for calculating land deficits resulting from heat repair works to the total income. Please note that if the taxpayer does not justify the new energy performance classification of the property by December 31, 2025 at the latest, it will be reformulated using methods that determine the gross income for the years after deducting property income and operating expenses. applied without action.

As furnished rentals are now widely favored by tenants, unfortunately, a similar incentive measure for furnished apartment rentals has not been considered.“, notes Mallory Boutron.

The end of Gensi-Bouvard

According to the Financial Inspector General’s June 2022 report on the assessment of the Gensey-Bouvard tax cut, the scheme will not be extended. Owners must invest in serviced residences by December 31, 2022 if they want to benefit from the income tax deduction.

For those who cannot afford to invest in Genesee-Bouvard until the end of the year, choosing a furnished rental remains a great way to optimize taxation by investing in any type of residence and without the commitment. By opting for the real regime, the investor can actually amortize the cost of the apartment, furniture and main works, and also deduct all his expenses, the main thing is the possibility of not paying tax on the rent received at a price of at least 10 manats. years“, – concludes Mallory Boutron.

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