How to report your rental income in 2022?

We are already in the middle of March and spring is just around the corner! The days are getting longer, the weather is warming up, and we find ourselves dreaming of a drink on a terrace surrounded by friends.

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April marks the return of warmer weather, but it also signals the start of tax filing season. Whether or not you are used to declaring your rental income, we have all the tips you need to complete your 2022 tax return.

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You can also find our advice on how to optimize your rental income and reduce your taxes with Climb, a platform that makes investing simple.

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Declaring your vacation rental income

How you declare your rental income depends on the amount. If this income brings in more than 23,000 euros per year and exceeds the other professional income of your tax household, you fall under the professional furnished rental tax regime.

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If you do not meet at least one of these two conditions, you are considered a non-professional furnished renter. Regardless of your situation, your vacation rental income is considered Industrial and Commercial Profits (BIC). This income will be taxed according to the progressive tax scale.

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Depending on your tax regime and the type of rental you offer, you will need to provide different information. Feel free to consult the explanatory guide that details how to complete the declaration or reach out to a professional. For our part, we have listed the different options for your rental below.

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Choosing the right regime for a vacation rental

You have several choices regarding the status of your vacation rental as a non-professional furnished renter (LMNP). There are two tax regimes: the micro-BIC regime and the real regime. Under certain conditions, you can also have your furnished tourist accommodation classified.

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Micro-BIC or real regime?

The micro-BIC regime is the default regime applied to a renter whose rental income is less than 72,600 euros per year. This regime allows for a 50% tax deduction and does not require specific accounting records.

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The second option is the real regime. It applies by default to LMNPs whose receipts exceed 72,600 euros. This regime allows you to deduct expenses related to your vacation rental activity.

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If your rental income is below the limit, you can voluntarily choose to opt for the real regime. For 2021 income, this request had to be submitted before February 1st of last year. However, it is still possible to choose this regime for your 2022 income. Simply send a letter to the tax office before filing your return this year.

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Classified furnished tourist accommodation

In addition to these two different regimes, and depending on the characteristics of your vacation rental, you can apply to have it registered as a classified furnished tourist accommodation. This classification indicates a specific level of service and quality.

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It is also advantageous from a tax perspective. The owner of a classified furnished tourist accommodation can qualify for the micro-BIC regime up to 172,600 euros, as well as an exemption from certain taxes. In this case, the deduction is also increased to 71%.

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Social levies and social security contributions

In addition to income tax, your rental income is subject to social levies or social security contributions depending on the amount and the regime you choose.

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If this income is less than 23,000 euros, social levies apply. They are set at 17.20%.

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Above an income of 23,000 euros, you will be required to pay social security contributions. The percentage will depend on the regime you choose: micro-enterprise, general regime, or self-employed.

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Lower your income tax

Filing your tax return can be a tedious process. If you decide to invest, you need to look at all the available solutions to choose the one that offers the most benefits. For seasonal rentals, there are several options that should all be taken into account.

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While rental investment remains a safe bet for many households, it can be difficult to navigate. Some platforms like Climb offer services to reduce your tax bill and optimize your investments.

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Thanks to its personalization process, this platform provides you with the best support for your tax filing and investment needs, with complete transparency and simplicity.

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The deadline for filing your tax return will be May 24, May 31, or June 8. It varies depending on your department of residence. If needed, do not hesitate to get support from a specialized platform or contact one of our advisors.