Do you rent a property on Airbnb, and you don't know what expenses are deductible from your income?
So this article helps you optimize your profitability as an Airbnb host!
When you decide to Becoming an Airbnb host and renting out your home is largely to generate additional income. But while this income generates a certain financial benefit, it also involves certain fiscal obligations.
Indeed, in France, the property taxation is very regulated and controlled. Therefore, it is crucial to be well aware of the various obligations of a landlord who rents their property on Airbnb. Fortunately, there are many deductible expenses that will allow you to optimize your Airbnb income.
Thus, you will discover some deductible expenses, such as:
And many more! So, if you want to find out what expenses are deductible from your Airbnb income, let's get started without further ado!
Before going into detail, it is important to contextualize and give you the differences of The 2023 Finance Law. Indeed, this law introduced several important changes in the tax obligations of Airbnb hosts, as this rental method is becoming more and more popular.
It is therefore essential to understand these changes to be able to report your Airbnb income correctly for taxes.
Concretely, the income from furnished rentals are taxed in the Industrial and Commercial Profits (BIC) category. The General Tax Code provides that the maximum revenue thresholds to maintain the micro-BIC taxation regime (a regime that offers a flat reduction in turnover charges) are updated every 3 years.
If you exceed a certain income threshold, you will not be able to access the lump-sum reduction of expenses on your turnover.
The maximum revenue threshold for the micro-BIC diet, for classic furnished rentals went from €72,600 to €77,700, and for furnished tourist accommodation and bed and breakfasts, it went from €176,200 to €188,700.
So you have more leeway...
Unfortunately, not everything is rosy. The furnished rental business is in principle exempt from VAT. But the law imposes VAT on owners if the furnished accommodation is supplemented by 3 para-hotel services, such as regular cleaning of the premises, the supply of household linen, customer reception and breakfast.
Thus, until recently, to be subject to VAT, all four para-hotel services had to be provided, which then included almost only hotels.
Since the Finance Act for 2023 has expanded the VAT liability for furnished tourist rentals, now only one of these four services is sufficient to be subject to VAT.
Important to know: If the gross annual turnover is less than €85,800, then you can opt for a franchise regime based on VAT.
So much for the news of the 2023 Finance Law. Overall, you will have to pay attention to the benefits and status you have to avoid being subject to VAT, and maintain a micro-BIC taxation regime.
As an Airbnb host, you can deduct certain expenses related to renting your home, like anyone who rents real estate. These expenses reduce your taxable income and therefore the amount of taxes you will have to pay at the end of the fiscal year.
So here's a list of the most common deductible expenses for Airbnb hosts.
You know it: manage your own tax declarations, it's complicated. It can be beneficial to use a professional accountant in some cases, even if the accountant's fees may be high...
But good news: these fees may be included in the category of expenses that are deductible on your furnished rental income!
Significant advantage: By hiring an accountant, you will benefit from his expertise, and you will be able to determine all the deductible expenses related to your rental activity on Airbnb!
When you Rent your home on Airbnb, some general expenses may be deducted from your income. These can include expenses related to running your rental business, such as water, electricity, gas, telephone, and internet bills.
These expenses can be deducted as costs related to maintaining your rental business, but you will first need to be well informed about specialized sites, in order to know what expenses fall into this category.
Over time, you will probably have some renovation work, repairs, or even maintenance costs for your home.
It's a whole category of expenses that can be deducted from your Airbnb income as a host. Here are some examples of deductible expenses for repairs and maintenance:
Obviously, these expenses are made on a case-by-case basis, which is why it is important, again, to find out what falls into the category of repair and maintenance expenses.
This fee category is a bit special. In fact, when you rent your home on Airbnb, you can deduct the advertising and promotion costs you incur to promote your listing!
For example, this may include professional photography fees, creative fees, and maintenance of a website dedicated to your rental, online advertising costs, etc...
Be careful though, because you will have to charge to keep proof of your Airbnb marketing expenses !
As an Airbnb host, you'll also need to pay management and commission fees to the Airbnb platform for each reservation. These are essential fees that can be deducted from your Airbnb income as operating expenses related to your rental business.
This is a very important point. Before you embark on a Airbnb rental activity, it is strongly recommended that you take out specific insurance for your rental business on Airbnb.
Insurance premiums can be deducted as operating expenses for your rental business.
If you can justify the necessary purchases of supplies or equipment for your home for rental purposes, these expenses can also be deducted from your Airbnb income.
This may include:
Remember, however, that this will not be 100% refunded to you.
A category that we often forget when we think of expenses that are deductible from Airbnb income is travel expenses. In fact, if you have to travel to manage your rental business, you can deduct transport and travel expenses from your Airbnb income, such as gas, tolls, parking or even car rental.
If you Hire staff To clean and maintain your home between two bookings, be aware that these fees can also be deducted from your Airbnb income.
Finally, in some cases, you can justify following a training course, whether to acquire a certification, or to improve your skills as a host. The cost of this training can be deducted from your Airbnb income, and you can also include the cost of buying theoretical material (books), training materials, etc...
Finally, before concluding, it is important to understand that all deductible expenses must be recorded and recorded in a formatted manner (most often in the form of an invoice).
This will allow you to be able to justify your expenses in the event of a tax audit, and you will therefore be able to deduct all these expenses from your income without any problem.
You were able to discover 10 types of expenses that are deductible from your income on Airbnb. Now, know that as an Airbnb host, it is essential to understand what expenses are deductible in order to be able to optimize your tax return, as well as how this mechanism works.
In fact, deductible expenses reduce your taxable income and therefore the amount of taxes you will have to pay... So this virtually makes you earn more money.
>>> To find out more about managing an Airbnb property, See you on our blog !
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