Is Airbnb About to Lose its Tax-Powered Superpower in France?

French politicians are urging the Council of State to cease tax benefits for Airbnb landlords. This cross-party initiative is aimed at countering the current disproportionate tax cuts for furnished tourist rental platforms such as Airbnb, Booking, and Abritel.

Tax Loophole Reduction

The budget has plans to scale down the tax loophole for platforms such as Airbnb, Booking and Abritel. Despite these plans, the government has yet to put this change into motion. A group of eight politicians, including LR senator Max Brisson and Socialist deputy Iñaki Echani, are keen on compelling the government to reduce this tax loophole.

The controversy stems from the preferential tax cut for furnished tourist rentals. At present, these businesses enjoy up to a 71% tax cut, whereas in theory, they should only get a 30% reduction in regions where securing housing is notably challenging. Critics argue that this tax advantage encourages property owners to prefer tourist rentals over traditional ones, leading to a scarcity of readily available housing for locals.

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Revenue Concerns

The debated tax cut is expected to generate a revenue of around €330 million in 2023. This proposal is raising eyebrows as it goes against the government's policy of not increasing taxes, a promise made by Bruno Le Maire and Emmanuel Macron since 2017.

PCF senator Ian Brossat has proposed an amendment to level the tax cut for Airbnb rentals with traditional rentals. This move is seen as challenging the government's “technical error,” perceived as a move to preserve Airbnb's tax benefit.

Differing Opinions

Interestingly, Guillaume Kasbarian, the newly appointed Minister of Housing, holds a different view from his colleague at Bercy, Bruno Le Maire. Kasbarian is in favor of reducing the tax cut provided to these tourist rental platforms.

The parliamentarians, to counter the current tax regime, have submitted a suspension and a foundational appeal for misuse of power to the Council of State. The Council of State will need to act swiftly as the 2024 income statement on 2023 incomes is fast approaching.

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