France 2027 budget cuts the short-term rental tax break
France 2027 budget would cap depreciation on vacation rentals at 1.5% and €5,000 a year. Here’s what it means for owners and property managers.
Source
[RSU by PriceLabs](/resources/people/rsu-by-pricelabs) France 2027 Budget Takes Aim at the Last Big Tax Break for Vacation Rentals
What It Says
The French government's proposed 2027 budget (projet de loi de finances) targets the loueur en meublé non professionnel (LMNP) tax status, which currently allows non-professional furnished landlords to offset their rental income through property depreciation.
Key elements of the proposed fiscal changes include:
- Depreciation Caps: Vacation rental depreciation would be limited to 1.5% of the building's value per year, capped at €5,000 annually per tax household across all properties. Long-term furnished rentals would receive a higher cap of 2.5% up to €7,000.
- Loss of Carry-Forward: Any depreciation exceeding the annual cap can no longer be carried forward to future tax years.
- Stricter Parliamentary Amendments: The National Assembly's finance committee has proposed even harsher measures, including an amendment to completely ban depreciation deductions for any vacation rental purchased after January 1, 2027.
- Revenue Targets: The government projects these changes will generate €260 million in tax revenue in 2027, eventually rising to €330 million annually.
Why It Matters
France is Europe's largest short-term rental (STR) market by nights booked and Airbnb's second-largest market globally. Because French regulatory trends often serve as a blueprint for other European nations, this fiscal shift could trigger similar tax crackdowns across the continent.
Currently, the actual-expenses tax regime (régime réel) allows approximately 68% of French furnished rental owners to declare a tax loss, effectively paying zero income tax on their rental revenue. By capping depreciation, a typical owner with a €200,000 property could face an estimated €2,000 in additional annual taxes. This represents the fourth major regulatory or tax blow to French STR operators in two years, following the Le Meur law of 2024, capital gains adjustments in the 2025 budget, and increased social security charges in 2026.
Useful Signals
- The €5,000 Cap is Household-Wide: Unlike US depreciation rules, the proposed French cap applies per tax household rather than per property, disproportionately impacting multi-property micro-portfolio owners.
- Exemptions for Long-Term Housing: Proposed amendments aim to spare corporate housing, student rentals, and "mobility leases" from the harshest limits, explicitly funneling inventory away from tourism and back into local housing markets.
- Industry Pushback: The French vacation rental association (UNPLV)—which represents major platforms like Airbnb, Abritel/Vrbo, HomeToGo, and Interhome—is actively lobbying against the budget, warning that tax instability threatens tourism inventory in key regions like the French Alps.
STR Tech Report Take
For STR technology vendors and property managers, this budget signals a permanent end to the "tax haven" era of French vacation rentals. Property managers operating in France must prepare for potential inventory churn as some individual owners, faced with higher tax bills, may choose to sell their properties or convert them to long-term rentals.
Tech vendors offering accounting, yield management, and financial planning software should rapidly update their localized tools to reflect these complex LMNP changes. Helping French hosts navigate the transition from the flat-rate (micro-BIC) to the restricted régime réel will be a high-value service offering in 2027.
Original Source
- Title: France 2027 budget cuts the short-term rental tax break
- Author: Uvika Wahi (October 23, 2026)
- URL: https://www.rentalscaleup.com/france-2027-budget-short-term-rental-tax/
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