The real estate rental sector offers various types of contracts, each with distinct legal frameworks to suit the needs of landlords and tenants. Among these options, furnished rentals and tourist rentals are two models often confused. However, they differ in terms of rental duration, taxation, and property use. In this article, we will explain the differences between these types of contracts.
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What is a furnished rental?
Furnished rentals refer to accommodations equipped with the essential furniture for daily living, allowing tenants to move in immediately. This type of rental is governed by the 2014 ALUR law and meets minimum equipment requirements. Furnished rentals can be used as a primary residence, with one-year renewable leases (nine months for students), or for long-term stays. Tenants typically live there for at least eight months a year and benefit from greater stability compared to seasonal rentals.
Mandatory equipment in furnished rentals :
• Bedding and duvet
• Table and chairs
• Storage
• Kitchen equipment (hob, oven, refrigerator, dishes)
• Lighting fixtures
This type of rental primarily attracts people looking for a stable accommodation solution , such as students, mobile workers or expatriates.
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What is a furnished tourist accommodation?
Furnished tourist accommodation is a property rented for short periods, typically to vacationers. It must be registered with the local town hall and can be classified by stars (from 1 to 5 stars), based on criteria of comfort, amenities, and location. This classification, while optional, can offer significant tax advantages to owners.
Unlike traditional furnished rentals, seasonal rentals are subject to stricter local restrictions, particularly in large cities like Paris, where legislation aims to limit tourist rentals to avoid a shortage of housing for permanent residents.
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The main differences between furnished rentals and tourist accommodation
1. Rental period:
• Furnished rental: Long term (minimum 1 year for primary residences).
• Tourist accommodation: Short stay (days, weeks), generally for tourist stays.
2. Use of the property:
• Furnished rental: Main residence or long-term stay.
• Furnished tourist accommodation: Secondary residence or accommodation dedicated to vacationers, rented occasionally.
3. Legislation and taxation:
• Furnished rentals: Subject to the Industrial and Commercial Profits (BIC) tax regime, with options for a simplified or actual regime, depending on the income generated. Rental income is declared as part of income tax.
• Furnished tourist accommodation: Tax exemption may be available if the property is classified as furnished tourist accommodation and rented for fewer than 120 days per year in high-demand areas. Owners must comply with specific administrative procedures (declaration at the town hall, sometimes prior authorization in certain municipalities).
4. Advantages for owners:
• Furnished rental: Ensures a regular income, ideal for a stable rental investment.
• Tourist accommodation: Benefits from potentially higher short-term income, particularly in tourist areas.
What are the legal obligations for a furnished tourist accommodation?
Renting out furnished tourist accommodation requires a more regulated process than a simple furnished rental. Among the obligations:
• Declaration at the town hall : All seasonal rentals must be declared in order to obtain a registration number.
• Classification of furnished tourist accommodation : Although not mandatory, it is strongly recommended to benefit from tax advantages and to attract more tenants.
• Compliance with local regulations : In some cities like Paris, regulations impose a strict limit on the number of days of rental (120 days maximum per year for main residences).
Why choose a furnished rental?
If you're looking to rent out a property long-term and achieve financial stability, furnished rentals are the best choice. They also offer advantageous tax benefits, particularly under the micro-BIC regime.
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Why choose a furnished tourist accommodation?
Furnished tourist rentals are a profitable option for those who own a second home or property in a tourist area. This model allows you to maximize your income during periods of high demand, such as summer or winter holidays.
However, it is essential to fully understand the administrative procedures and tax implications before venturing into tourist rentals. Indeed, in some cities, the rules are strict, and failure to comply with local laws can result in hefty fines.
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In conclusion
Although similar in some aspects, furnished rentals and tourist rentals differ in several key areas: the rental period, legal and tax obligations, and the intended use of the property. Choosing one or the other depends on the owner's objectives: seeking regular income and rental stability, or maximizing profits over short periods with seasonal rentals. Before making your choice, it is crucial to consider local regulations, especially in large cities like Paris.