The para-hotel regime and Airbnb concierge services: are they compatible?

The parahotel regime is part of the Airbnb concierge and short-term rental sector, yet it remains largely unknown to many property owners. However, it offers significant advantages, especially for those renting out new properties. Many owners also mistakenly believe that once a property is managed by a short-term rental agency, they are no longer eligible for this tax status. Let’s clear up this misconception and define how this regime works with Airbnb concierge services.

What is the parahotel tax regime?

The parahotel tax regime is a specific tax status that short-term rental owners can qualify for under certain conditions. It is called "parahotel" because it depends on providing services to short-term tenants (in campsites, gîtes, bed and breakfasts, and furnished tourist rentals) that are similar to those offered in the hotel industry. It is essentially a hybrid model between a simple furnished tourist rental (like an Airbnb) and a hotel.

To qualify for this specific tax regime and enjoy its benefits, you must offer at least three out of four specific services in addition to accommodation. Owners under this regime become parahotel operators and are fully responsible for their guests.

What services must be offered to qualify for this regime?

The parahotel regime is defined and regulated by specific services that must be marketed alongside the rental property. There are four such services, and as mentioned, you only need to provide three of them to qualify. The primary criterion governing these services is that they must be as close as possible to the quality of services provided in hotels.

1- Providing breakfast;

For this service, you must be able to provide breakfast to all tenants if they request it. The breakfast must comply with current health and professional standards. These standards stipulate that the breakfast must be delivered to the tenants within the rented property or, where applicable, in a room within the same building where the tenants are staying. At Welkeys, our City Manager in La Rochelle offers this service upon request, and she or her on-site concierges deliver breakfast to the tenants.

2- Providing frequent cleaning of the rental property;

To qualify, you must perform frequent cleaning of the rental property during the tenants' stay. The frequency of this cleaning must exceed what is required by short-term rental platforms, which typically only ask owners to clean between bookings.

Indeed, for this to count as a parahotel service, it must resemble the service offered in a hotel. In a hotel, cleaning is performed multiple times throughout a guest's stay. Therefore, you must be able to clean the property multiple times during the tenants' stay.

3- Providing household linens;

The criteria for this service under the parahotel regime are equivalent to those for the cleaning service. Again, you must be able to provide household linens to all tenants for the entire duration of their stay and replace them if they request it.

4- Welcoming guests at the beginning of their stay;

As in a hotel, you must allow tenants to access their accommodation at the start of their stay and provide them with the means to come and go as they please throughout their booking. This welcome does not necessarily have to be in person. An electronic key box can therefore be counted as part of this service under the parahotel regime.

What are the advantages of the parahotel regime for owners?

On one hand, since this is considered a commercial activity, owners of rentals under this regime are subject to VAT. It applies to and must be charged on rental income and any additional services offered. The VAT collected must be declared and paid to the tax authorities annually.

However, on the other hand, the VAT on expenses incurred by the parahotel activity can be recovered. It can be deducted from the costs generated by the goods and services used to maintain the rental. This regime is particularly attractive for owners who have built one or more properties for rental purposes or for those who are carrying out renovation work to rent them out.

In these cases, it is possible to recover the full amount of VAT generated by the work. Furthermore, if the parahotel activity continues for more than 20 years, the refunded VAT will remain entirely with the owner.

Additionally, regarding income tax, several expenses are deductible: energy consumption, local taxes, management fees, the owner's travel expenses, etc.

Is this tax regime compatible with using a property management service?

The parahotelier (para-hotel) regime is compatible with using a property management service, as the owner is not required to perform the services personally. It is permitted for a third party to carry them out. Therefore, the staff of the management company handling the property can provide these services without the owner losing their status as a para-hotel operator.

However, to establish a clear framework between the owner under the para-hotel regime and the management company performing the services, and to ensure the owner retains their operator status, it is essential to have a contract between the two parties. This contract, in the form of a mandate, must explicitly and unambiguously define the responsibilities and duties of both the owner and the management company.

At Welkeys, we offer a para-hotel management mandate to owners who are subject to this regime and wish to entrust us with the management of their short-term rental. Thanks to the management services we provide, our owners can qualify for this specific regime. Please feel free to contact us to learn more about our mandate.

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