The Para-Hotelier Regulations

A professional property owner benefits from certain taxation advantages, most notably, on capital-gains tax and on solidarity tax. It is not as easy as it seems, however, to put this regulation into good use, as the following three conditions must also be fulfilled:

– the annual revenue from this activity by all members of the tax household exceeds €23,000;
– the receipts exceed the income of the tax household subject to income tax in the categories of salaries and wages within the meaning of article 79 of the CGI (including pensions and life annuities as well as the income of managers and partners mentioned in article 62 of the CGI), industrial and commercial profits other than those derived from the furnished rental activity, agricultural profits and non commercial profits.
– The professional or non-professional nature of the furnished rental is assessed at the level of the tax household and applies to all the furnished rentals of the tax household

However, although it is relatively easy to have revenues of over €23,000 (tax included) per year (abov eall on the Ile de Re), it is harder, for working people, to fulfill the third condition.  Anyone who doesn’t meet all three of these criteria is automatically considered a non-professional rental property owner.

This is why we limited our study to exclusively tackle the tax regulations of professional property owners, as this is what is relevant for the majority of the property-owning clients of Bon Séjour en France.


We will see that another way does, in fact, exist.  There are specific regulations for rental property owners who are able to provide at least three of the following four services under the bracket of their rental activity:

  • The prevision of breakfast,
  • The regular cleaning of the accommodation,
  • The prevision of house linen,
  • The greeting  (by the owner himself or a third party) of the clientele.

If the rental property owner provides at least three of the four services he loses his title of ‘property renter’ and becomes a ‘para-hotelier’ manager leading to a change in the taxation regulations.  The para-hotelier manager is subject to V.A.T. on the income from his furnished rental accommodation and from any further services provided, and can claim back the V.A.T. from these charges and from the construction price of the building in question or the price of the renovation works, for example.

Moreover, if certain conditions are fulfilled, one can allocate possible deficits of one’s para-hotelier activity to revenues that fall under other relevant categories (salaries, revenues from property…).

These regulations are independent from those imposed for professional or non-professional rental accommodation.  In effect, it’s the para-hotelier nature of the services provided within the rental bracket that classifies the fiscal activity and not just the simple action of putting your property up for rental.

What is a para-hotelier ‘manager’?  According to the fiscal administration the manager is the individual who personally takes on the risks and is responsible vis-à-vis the clients.  This implies that he acts in his own name as far as the clients are concerned.  Recourse to an intermediary acting in the name of, and on behalf of the manager with regard to the clients, does not cause the manager to lose his title.  This only occurs if the representative actually takes on the risks of the operation or if he acts in his own name when dealing with the clientele.

On the other hand, a sublease mandate that would consist, for a representative, of renting furnished accommodation in order to sublet it to seasonal tenants, would cause the representative to lose his title of para-hotelier.


The tax office has named a certain number of specifications to which the four para-hotelier services should abide. These services must come as close as possible to the services that one would normally find in a hotel.

Therefore, when it comes to the provision of breakfast, the manager must be in a position to provide breakfast, if needed, to the entirety of the tenants in line with the norm.  It is unlikely that you will be in a position to provide breakfast each morning to your tenants so is therefore necessary to concentrate on the provision of the three other services in order to be qualified as a para-hotelier manager.  The rental accommodation should be cleaned regularly during your tenants’ stay.  This condition is fulfilled if, even if you don’t actually provide a regular cleaning service, you are in a position to offer this service in a set time frame during your clients’ stay.  Cleaning simply at the beginning and at the end of the stay is not enough.

You must be able to provide the house linen to all your tenants during the stay.

Finally, you must be in a position to offer a reception service to your clients.

These para-hotelier services can either be carried out by you or by a third party.

If you turn to an intermediary to rent your property and/or provide para-hotelier services, it is therefore essential to clearly define in the contract the responsibilities and the tasks of each member of the team and to use the correct terms in order to eliminate all ambiguities and avoid any risk of reclassification by the tax office.

Fiscal characteristics of para-hotelier regulations.


These regulations are particularly interesting if you specifically construct a property for rental purposes or if you begin significant works on an existing building.  In this case, you can receive a total reimbursement on the works according to their gradual progress on the condition that you rent your property for a minimum of twenty years.  This could represent an incontestable financial advantage.  However, if this rental period is interrupted you will be obliged to pay back some of the V.A.T..

Each year you need to add V.A.T. to your invoice from your rental property (10% in 2020) and from other services provided.  You can charge against this V.A.T., the V.A.T. that you incur yourself on the goods and services concerning the management of your furnished rental property.  If you decide not to receive a reimbursement on the V.A.T., the V.A.T. collected from rent and from services provided will come as a deduction from the V.A.T.’s credit until it runs out.

In order to recover the V.A.T., you must abide by the V.A.T. regulations when you purchase or construct your property – seek the advice of a public accountant who will guide you through the formalities of looking after your declarative requirements thereafter.  It is no longer necessary to be signed-up to the register of commerce and businesses in order to be in line with these regulations as a para-hotelier manager.


Para-hotelier activity, as does furnished rental, falls under rules concerning its industrial and commercial profits.  In order to charge potential deficits of your para-hotelier activity to the other incomes of your taxable household, it is necessary that the activity be considered ‘professional’, meaning that it is characterized by personal, direct and continuous participation by one of the members of the taxable household, fulfilling the necessary requirements.  If you call on a third party to carry out the activity without intervening yourself on a significant scale, you can’t be considered a professional.  The article 156-1 states, in particular, that ‘it is thus, in particular, when the management of the activity is entrusted by law or in reality, to someone who isn’t a member of the taxable household according to a mandate, a work contract or any other convention.’

As you can see, the criteria for subjection to V.A.T. and the criteria governing the deduction of deficits aren’t exactly the same.  In order to reduce a deficit, it is advisable to participate significantly in para-hotelier activity.  The documentation provided by the tax office talks of a ‘body of clues’ and asks tax  departments to consider each situation according to these clues.  The tax office states that ‘the participation in an activity must result from the fulfilment  of an ensemble of constituent acts which make up one of the necessary functions to the business and not just separate acts, even if they are themselves necessary to the activity (signature of the taxation declarations, for example)’.

You should, therefore, spend some time managing your activity yourself even if you don’t personally carry out each para-hotelier service, something that could be complicated to set up if you don’t live in the area and you leave the management of your property to a third party…