PARIS: A hotel lobbying group in France has succeeded in getting the country’s parliament to tighten tax laws on rental income in an effort to slow Airbnb’s growth in the country, The Financial Times reports.
The law will require Airbnb to send tax data to the French government, rather relying on individual hosts who use the service to provide it.
This comes on the heels of legislation passed earlier this year that effectively makes it impossible for Paris residents to rent out their properties for more than 120 days per year. If residents want to do so, they must register the property with the city government as commercial property. In Paris, that means the individual registering the property would also have to buy an equal amount of commercial property in the neighborhood and convert it to residential property. Individuals breaking the rule could be fined more than $26,000.
The city government in Paris estimates that most Airbnb listings in the city violate the 120-day rule and intends to crack down on such violations. France, and Paris in particular, is a key market for Airbnb, and enforcement of this rule could severely reduce the number of listings it has in the French capital. Paris was the third most visited city in the world through September 22 of this year, according to MasterCard’s Global Destination Cities Index, which tracks consumer spending on airline tickets, hotel stays, and other vacation purchases. Meanwhile, Airbnb has said the city government is overestimating the number of listings violating the rule.
Airbnb has increasingly conceded to city regulators lately regarding new restrictions on the service and its listings. It now limits hosts on its service in New York and San Francisco to one property per host, and limits how many days hosts in London and Amsterdam can rent out their property. The company might not follow that path in France though, as the hotel lobbying group is seeking further restrictions on Airbnb rentals there. The group wants the French government to increase taxes on Airbnb rentals to include social security tax, VAT sales tax, and a new nightly tourist tax. Airbnb will likely oppose any efforts to impose such taxes on its hosts.
