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• Furnished or para-hotel rentals subject to VAT: what you need to know

In principle, furnished rentals for residential use are exempt from VAT.

By exception, since the 1^Er January 2024, article 261 D, 4° of the General Tax Code (CGI) automatically taxes the following accommodation and furnished rental services at VAT:

- accommodation services provided in the context of the hotel sector or sectors with a similar function (Para-hotelier), offered to the customer for a duration not exceeding thirty nights and including the provision of a furnished room and at least three services following: breakfast, regular cleaning of the premises, the supply of household linen and the reception, even if not personalized, of customers;

- the rentals of furnished accommodations For residential use within the framework of other sectors, with at least three of the same benefits mentioned above.

This article of the CGI comes from article 84 of the Finance Law for 2024, which reorganized the VAT regime for furnished rentals for residential use following a partial non-compliance of the para-hotel system with the VAT directive 2006/112/EC.

On this new regulation, the administration has come to specify twice, during the updates of its administrative doctrine on August 7, 2024 and March 26, 2025, the criteria for the VAT taxation of accommodation services and furnished rentals.

The status of the service provider is no longer a criterion for determining whether a stay is exempt or taxable to VAT. In practice, taxation is likely to apply to various structures such as apartments located in a multi-family building or individual constructions such as hotels, villas, chalets, chalets, chalets, chalets, cottages, cottages, cottages, cottages, service residences, student residences, senior residences, retirement homes, coliving...

On the so-called “para-hotel” services offered, as soon as three of them are insured or actually offered (via a display on the premises, the welcome booklet, written exchanges with the customer or the website, etc.), VAT applies automatically.

The details provided by the administrative doctrine on these services are relatively precise, which for the furnished rental company may have consequences on his rental activity: exempt from VAT with no possibility of deduction on expenses relating to this activity (in particular on the purchase of the property) or taxable at VAT with possible adjustments to be made in the past.

For example, the following services can make the furnished rental company switch to the exempt side or the other taxable side in terms of VAT:

- the provision of a food and/or drink vending machine is not considered as a para-hotel breakfast service;

- cleaning done at least before the start of the stay of a maximum of five nights is sufficient to be a para-hotel cleaning service for the premises;

- the provision of a launderette, when the linen must be renewed, is not sufficient to be qualified as a para-hotel service for the supply of household linen;

- the mere provision of keys via a key box, without an alternative offered with a physical reception (videoconference or telephone), is not sufficient to be characterized as a para-hotel service for welcoming customers.

An analysis of the conditions of exercise of the furnished rental activity by each lessor in light of current and recent VAT regulations is therefore strongly recommended.