LMNP non-professional furnished letting in Corsica: tax on furnished and holiday lets

Micro-BIC tax regime or actual-expenses regime?

The micro-BIC simplified tax regime applies a flat-rate allowance to revenue: simple, with no accounting required, but it takes no account of actual expenses. The actual-expenses regime allows all expenses to be deducted — mortgage interest, property management, cleaning, insurance, property tax, energy — and, above all, depreciation of the property and furniture.

In practice, where there is an outstanding loan, renovation work or professional holiday rental management, the actual-expenses tax regime generally eliminates tax liability for several years. This is the most common situation for villas on the Corsican coast.

• —Micro-BIC tax regime: preferable for a small supplementary rental with no borrowing.
• —Actual-expenses tax regime: preferable when expenses exceed the flat-rate allowance.
• —The actual-expenses regime requires accounts to be kept and a qualified accountant to be engaged, whose fees are deductible.

Rated or unrated furnished holiday accommodation

The star rating, awarded for five years following an inspection by an accredited body, provides access to a more favourable tax allowance under the micro-BIC regime and a higher revenue threshold. The rules for furnished holiday lets have tightened in recent years, with reduced allowances for unrated properties.

At very little cost, obtaining a rating remains one of the best tax choices for an owner of a seasonal rental property in Corsica. It also improves positioning on booking platforms.

Obligations and contributions

All furnished letting activity requires registration and a SIRET business identification number. Above 23 000 € in annual revenue, short-term letting becomes subject to social security contributions, with a choice between the general scheme and the self-employed scheme.

The cotisation foncière des entreprises (CFE), a business property tax, is payable, except where the first-year exemption applies. Tourist tax is collected on behalf of the commune.

• —Register the furnished rental with the town hall and display the registration number.
• —Declare income as BIC (industrial and commercial profits), using form 2042-C-PRO.
• —Unused depreciation deductions can be carried forward indefinitely under the actual-profit tax regime.