A recommendation often circulates among real estate investors: why settle for furnished rentals when para-hotels seem to offer additional advantages?
Indeed, the parahotel industry would make it possible to combine the benefits of the attractive taxation of furnished rentals while recovering VAT on investments and general expenses.
But is it really an El Dorado for investors? In this article, we explore why short-term rentals (LMP and LMNP) might prove to be a better option.
To understand the para-hotel business, it is essential to distinguish this activity from traditional furnished rentals. According to Article 261D of the General Tax Code (CGI), an activity is considered to be a para-hotel if at least three of the following four services are provided in addition to furnished accommodation:
- The reception of the people accommodated
- The supply of household linen
- Breakfast
- Regular cleaning during the stay
To be qualified as a para-hotel, the activity must actually include these services for part of the stays. The complexity and costs of setting up these services can be a significant barrier for many investors.
Although the parahotel industry seems attractive on paper, it has some notable challenges:
Para-hotel operators must register with the Trade and Companies Register (RCS) and are affiliated to the social security system for self-employed persons, which implies additional contributions.
Although para-hotel operators can recover VAT on their investments, they are also subject to long-term commitments. In case of sale or departure from the scope of VAT before 20 years, the VAT initially deducted must be adjusted. This limits the flexibility of investors and can lead to unexpected costs in the event of an early sale.
Furnished rentals, whether LMP or LMNP, offer much simpler management compared to para-hotels. Investors don't have to provide additional services like breakfast, which reduces complexity and costs.
The LMP and LMNP regimes are well established and offer advantageous fiscal flexibility without the constraints of VAT. Capital gains benefit from a favourable regime, and deficits can be more easily attributed to all income for professionals.
Careful! The legislator is preparing changes to the Furnished Rental regime. Rest assured, investors who choose the simplified real regime will not be impacted by these changes. Before you start, contact us: we will help you choose the diet that suits you!
The rents received for short-term furnished rentals can often be higher, without the additional obligations of the parahotel. This increased profitability, combined with more flexible management, makes furnished rentals an attractive option for many investors.
Choosing the LMP or LMNP regime does not mean missing out on the quality that could be offered in the hotel industry!
Our offer is to offer travelers accommodations in which they would find all the comfort of a hotel. We offer beautiful accommodations located in strategic locations. The traveller finds in our accommodations hotel-quality bedding and a layout designed to optimize their experience.
Short-term rental is a profession. So trust us with your property to see your investment profitable.
Short-term rentals, thanks to its numerous advantages, remain an option of choice for investors looking for a balance between profitability and ease of management. To make your investment profitable, entrust it to short-term rental experts. Our expertise and our offer allow you to increase your revenues from LCD. Make an appointment with our advisers to entrust us with your property.
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