The increase in privately-managed holiday rental properties has led to stricter legal requirements in recent years. Online Booking platforms such as Airbnb, for example, have seen a huge increase in inventory, causing the French government to tighten their regulations in order to control the quality of accommodation.
At OVO Network, we keep on top of all holiday rental legal requirements and our dedicated account managers keep our owners informed of any changes.
In this post, we highlight the key legislation you need to be aware of when setting up a holiday rental business in the French Alps, including:
- Declaration at the local Mairie
- Obtaining a SIRET number
- Tax declarations
- Tourist tax (taxe de séjour)
Read on for more detail…
Declaration at the local Mairie (town hall)
Any owner who rents out a furnished property must declare/register it with the local Mairie (town hall) or they could be subject to a substantial fine.
Since 2009, any individual offering furnished tourist accommodation for rent, whether or not it is classified in accordance with the Tourism Code, must first make a declaration to the mayor of the municipality where the property is located.
It’s important to note that the Mairie declaration is linked to the “taxe de séjour” (tourist taxt) and “official classification” (star rating) – more on that later in the article.
How do I register my holiday rental business with the Mairie?
There are two ways to register your holiday rental business with your local Mairie; in person using the CERFA form or online using DéclaLoc.
The declaration must specify the following:
- The owner’s identity.
- The owner’s address.
- The address of the rental property.
- The number of rooms making up the property.
- The number of beds.
- The planned rental period(s).
- Where applicable, the date of the classification decision and the classification level (star rating).
The CERFA form has been introduced for this very purpose and owners can give permission for a representative such as a real estate agent or property manager to complete it on their behalf.
If the property undergoes a significant modification such as a new official classification score, a change of owner, an increase/decrease in the capacity, etc, then a new declaration is necessary. However, in principle, if the planned rental periods change, a new declaration is not required.
DéclaLoc is an online service available in some municipalities. When the owner makes the declaration, they must indicate whether or not the furnished holiday rental is their main residence.
Once the online declaration has been made, the owner obtains a 13-digit number which must appear on all rental advertisements including online travel agents (OTAs).
After completing/returning the form, you will receive a confirmation of declaration and the procedure you need to follow in order to declare your tourist tax.
You also need to make sure you have public liability insurance. This is a type of business insurance that covers the cost of possible claims made by the public.
Public liability only covers incidents which happen on your business property including…
Public liability insurance helps to cover expenses if someone is injured.
It helps to cover damage to a third party’s (ie. the guests) property if damage was caused by your business.
It covers the cost of legal claims made against you, such as the costs of paying an attorney to represent your business in a lawsuit brought on by a guest.
Obtaining a SIRET number
(Système d’Identification du Répertoire des Établissements)
Another requirement is declaring your activity to the Clerk’s Office of the Commercial Court.
Unlike the Mairie declaration mentioned at the beginning of this post, this is the process of you, as an owner, obtaining a SIRET number for your business. It then becomes the identity of your business and will be used to provide invoices and get a business bank account.
To do so, you must complete a form called “Cerfa P0i” and send it to the court, which will then provide you with a SIRET number (Système d’Identification du Répertoire des Établissements or “Directory of Establishments Identification System”), which corresponds to the legal registration of your activity as a holiday rental company.
Here are the steps:
1. Download the P0i form
To download the form, first head to this webpage. Then, click on the button displayed below.
2. Complete the form
We appreciate completing the Cerfa P0i form is not easy for non-French speakers, so if you need assistance please contact Sue Whitter who is an English accountant living in France and can give you a direct quote for the service.
3. Find your local Comercial Court
The form then needs to be sent to your local Commercial Court. To find its address, enter your postcode here.
Send the P0i form to the address starting with “Tribunal de Commerce”. They will then contact you with your SIRET number.
LMNP or LMP status
Before making tax declarations, you must enquire about your property’s status and its corresponding tax regimes.
You will have to choose between the following:
- LMNP status (Loueur Meublé Non-Professionnel or “non-professional furnished rental”)
- LMP status (Loueur Meublé Professionnel or “professional furnished rental”)
The LMNP status explained
The LMNP status is for owners who wish to supplement their income by renting a property on a seasonal basis. Ie this is not their primary source of income. With this status, owners must not exceed 70,000€ in annual turnover.
It is easy to manage in terms of taxes, the declaration is simple, and you can choose to declare your income under the “micro-enterprise” regime or the “real regime”.
However, your property will be subject to IFI (Impôt sur la Fortune Immobilière) or “real estate wealth tax”.
The LMP status explained
The LMP status is designed for people who want to rent out seasonal accommodation full-time and make it their main business activity.
With this system, you will be able to exceed 70,000€ in annual turnover and deduct property maintenance costs from your expenses.
However, be aware that this regime only becomes interesting once you generate at least 40,000€ in turnover per year, and you will be subject to the payment of social security contributions.
Taxe de séjour (tourist tax)
Guests are legally required to pay the tourist tax (Taxe de Séjour). Owners are legally responsible for collecting, declaring, and paying the correct amount of tax to the local Mayor’s office.
- Each local commune sets the level of tax to be paid per guest per night, the age range of those required to pay the tax, and if a tourist tax is to be charged at all.
- Owners declare guest numbers monthly, and pay the taxes due twice a year to the commune, on behalf of their guests. Most communes are affiliated with the DéclaLoc platform for the declaration and payment of tourist tax collection.
- Check your local commune website, or ask your local Tourist Office for more information about registration, declaration and payment of local Tourist taxes. They can also provide information on initiatives and projects funded by the tourist tax each year.
How much is the taxe de séjour?
The amount guests have to pay depends on the official classification (star rating) of the property. A non-rated property will automatically pay the highest rate or “Palace Rate” of taxe de séjour regardless. You can check local rates on this website.
Registering with the local Mairie does not award you an official classification. It is a different process.
It is vital that your property is compliant with fire-safety regulations and has all necessary equipment to keep guests safe in the case of a fire.
You will need to take the following steps:
- First, contact a fire safety company and ask them for a quote (we recommend MAT-SEC as they speak English).
- The company will visit your property and assess its fire safety needs and then send you a quote.
- Your property is then fire-safe for guests, however, make sure you conduct further safety checks (eg a nail sticking out, a wonky chair, an uneven step, etc).
(Society of Authors, Composers and Publishers of Music)
In France, owners of holiday rental properties are required to pay for an annual subscription which allows guests to play music within their property.
For properties with up to 10 rooms, guest rooms, gîtes, and furnished tourist accommodation, the amount of royalties is a single annual fee, regardless of the period of use, covering broadcasts in the rooms and common areas.
This annual fee ranges from approximately 95€ to 120€ excluding VAT.
The royalty costs consist of:
- The flat rate for free broadcasts in all the equipped rooms
- A proportional calculation of the rights
Click here to download the form (French only).
If you enjoyed reading this, head over to our starting out archives or take a look at these other handy guides:
- The complete guide to running a ski chalet rental in France
- Converting your second home to a rental property
And don’t forget to sign up for our Aline Property newsletter to be the first to receive tips on running your holiday rental business, expert opinions and the latest industry news.
If you want to own a successful holiday rental business and enhance the resale value of your property while hardly lifting a finger, then contact OVO Network today or try our free short-term rental income calculator.