Change VAT System for Holiday Rentals
Important Change in the VAT System for Holiday Rentals in France
VAT Regulations for Holiday Rentals
The VAT rules for holiday rentals in France depend on the services provided. Offering certain hotel-like services determines whether the rental should be charged with or without VAT. Four services are relevant in this context:
- Reception
- Breakfast
- Linen
- Regular cleaning
As a landlord, you are required to charge VAT when at least three of the four services are offered to tenants. This also allows you to deduct VAT on expenses and investments for the rented property. However, if only two or fewer of these services are provided, the rental is exempt from VAT, and VAT deductions on expenses are not possible.
Change in the “Regular Cleaning” Criterion
An important change now concerns the criterion of “regular cleaning.” Previously, cleaning only at the beginning and end of the stay was considered insufficient to meet this criterion. Under the new regulation, however, weekly cleaning is now considered sufficient. This means that landlords who perform weekly cleaning can now meet the requirement of three services, making their holiday rental subject to VAT.
Implications for Your Rental File
This new guideline may impact the VAT scheme for your holiday property and the administrative handling of your file. In light of this change, you may adjust your cleaning frequency to meet the VAT requirements, which could potentially provide you with significant financial benefits.