The Law No. 2024-1039 of November 19, 2024, Known as the Le Meur Law
The Le Meur Law introduces measures to regulate short-term furnished rentals, particularly those offered through platforms like Airbnb. This legislation addresses concerns about the imbalances in the rental market, especially in high-demand areas where access to housing for permanent residents has become increasingly challenging.
Context and Objectives of the Le Meur Law
Deputies Annaïg Le Meur and Inaki Echaniz, the law’s sponsors, emphasized that housing had become a tool for tax optimization, enabling excessive tax exemptions. In the most constrained areas, many workers can no longer live near their workplaces, some businesses relocate due to a lack of housing for their employees, and tenants are evicted to convert properties into short-term rentals.
Key Provisions of the Law
1. Taxation of Short-Term Rentals
The Le Meur Law significantly changes the “micro-BIC” tax regime, considered one of the advantageous tax niches for short-term rentals, particularly for owners using platforms like Airbnb. The main changes are as follows:
- For classified rentals and guesthouses: The tax deduction is set at 50%, with a cap of €77,700 in annual rental income (previously 71% with a limit of €188,700).
- For non-classified rentals: The tax deduction is reduced to 30%, with a cap of €15,000 in annual rental income (previously 50% with a limit of €77,700).
These new deduction rates will apply to rental income earned starting in 2025. However, for 2024 income, the current rates will remain applicable until the 2024 Finance Law is implemented.
The 2024 Finance Law had already set the 30% rate for non-classified rentals. A tax note issued in February 2024 allowed taxpayers to continue applying the previous rates and thresholds. However, on July 8, 2024, the Council of State annulled this tax note. Since the annulment was not retroactive, it had no impact on taxpayers who had declared their 2023 income within the deadlines.
Additionally, the initial text also proposed eliminating another Airbnb tax niche, which has now been included in the 2025 Finance Bill (PLF). Starting January 1, 2025, taxpayers under the non-professional furnished rental (LMNP) regime will no longer be allowed to deduct property depreciation when calculating capital gains on property sales.
This fiscal tightening aims to rebalance the rental market in high-demand areas by limiting the excessive advantages granted to short-term rentals.
2. Increased Powers for Local Authorities
- Limiting Rental Days: Mayors can now reduce the number of days permitted for renting primary residences as short-term rentals below the national limit of 120 days per year.
- Introducing Quotas: Municipalities have the option to set quotas limiting the number of short-term rentals in specific areas to preserve the balance of the residential rental market.
3. Energy Performance Diagnostics (DPE)
- Energy Requirements: Starting in 2025, short-term rentals in high-demand areas must present an energy performance certificate (DPE) with a minimum rating of F. This requirement will increase to E in 2028 and D in 2034, aligning these rentals with the standards applicable to long-term leases.
4. Strengthened Sanctions
- Higher Fines: Owners who fail to comply with the new regulations risk fines of up to €5,000 for non-compliance with DPE requirements and up to €50,000 for illegal conversions of residential properties into short-term rentals.
Consequences for Short-Term Rentals
Impact on Property Owners
- Reduced Profitability: The decrease in tax advantages may lead to a drop in the profitability of short-term rentals, prompting some owners to reconsider their business models.
- Required Investments: The stricter energy performance requirements compel owners to undertake renovation work to meet the new standards.
Impact on the Rental Market
- Return of Properties to the Residential Market: Measures to limit short-term rentals in high-demand areas could encourage property owners to reintegrate these homes into the long-term rental market, helping to alleviate housing shortages.
- Rent Stabilization: By increasing the supply of homes available for permanent residents, the law may help stabilize or even reduce rents in certain areas.
Conclusion
The Le Meur Law represents a turning point in the regulation of short-term furnished rentals in France. By reinforcing fiscal and energy obligations for property owners and granting greater powers to local authorities, it aims to rebalance the rental market for the benefit of permanent residents. Short-term rental owners must now adapt to this new regulatory framework to avoid significant penalties.
