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Are Short-Term Rentals Legal in Paris?
The Easy Answer: Yes, If You Find the Right Apartment.
Plus, two off-market properties that can legally rent out short-term, the perfect mix of personal use and investment over the long-term.
Paris, a global economic hub and one of the world’s most visited cities, offers a unique blend of stability, demand, and profitability for real estate investors that few other markets can match. Investing in a short-term rental in Paris can be a savvy move for the right investment portfolio, as long as you know the rules and navigate the market effectively.
Here is a thorough overview of the legal and financial considerations you need to be aware of to succeed in this market.
Investing in a short-term rental property in Paris lets you tap into a thriving tourism and business travel market while enjoying the city’s enduring appeal and resilient property values. With the right property and management strategy in place, a Parisian short-term rental can generate significant passive income and become a valuable asset that appreciates over time.
Buyers beware: most—if not, nearly all—residential apartments in Paris cannot be rented out on a short-term basis. And if you are caught doing it illegally, fines can reach up to €50,000—quite a costly mistake.
Legal Landscape for Short-Term Rentals in Paris
The city has implemented strict regulations on short-term rentals to balance the needs of residents and visitors.
Primary Residences: IIf the property is your primary residence, you can rent it out for up to 120 days per year of short term rentals (defined as 29 days or less) without any special authorization. A primary residence is defined as a dwelling occupied for at least 8 months per year.
Secondary Residence or Pieds-à-terre: A secondary residence is everything else, from an investment purchase to a personal use (“second home”) property. To legally rent a secondary residence in a short-term capacity, the property must have (1) a “commercial” use designation and (2) a short-term rental permit, both issued by the city of Paris.
Properties that already have commercial (or mixed use) designation are often former boutiques, ground floor courtyard apartments, artist ateliers, or other unusual spaces that were not originally designated for residential use. With commercial designation in place, the apartment must also have the short-term rental permit to operate legally, with the registration number must be displayed in any digital ads promoting your property. In fact, AirBnb will refuse to publish your listing without it.
The city of Paris is no longer issuing any new short-term rental permits. So, if the property you purchase already has this permit in place, it is frozen into a limited pool of legal short-term rentals in Paris that, at least for now, is never going to get bigger. All other properties, even if they do receive commercial status, will not be able to secure the required short-term rental registration. In other words, the limited inventory of these kinds of investment opportunities is not getting any bigger.
For Sale: Two Authorized Short-Term Rental Properties in Paris
There are very few legal short-term rental apartments available to buy in Paris. Thanks to PPG’s intimate knowledge of the Parisian real estate market and our strong relationships with a network of local partners, we have been able to source and evaluate properties that have this important and rare short-term rental designation to share with our community. We are excited to share two such opportunities here:
1. Rue Etex (17th Arrondissement)
This beautifully renovated ground-floor property on rue Etex offers an independent street entrance and boasts a total area of 50m² on the ground floor and an additional 20m² in the sous-sol (underground/basement) space. The apartment has soaring ceilings and has been thoughtfully renovated, designed, and furnished to maximize its comfort and functionality. It features two bedrooms, two bathrooms, and a separate toilet, with accommodations for up to six guests.
The total acquisition price for this property is €836,000 all-inclusive (seller net price plus commission, closing costs, and taxes, and all furnishings), and offers an impressive estimated annual revenue of €65,000 (net of rental management fees). This translates to a significant 7.8% triple-net yield return on investment, all expenses included.
2. Place Alphonse Laveran (5th Arrondissement)
This ground-floor apartment currently in full renovation offers an independent street entrance giving onto the beautiful Place Alphonse Laveran, with a total area of 46m² on the ground floor and an additional 8m² in the sous-sol (underground storage) space. The apartment will be completed by early fall, equipped with similar high-quality modern finishes as the rue Etex apartment above. The apartment will feature one bedroom and one bathroom, with accommodations for up to four guests. An early buyer will have the opportunity to select finishes and furnishing as well.
The total acquisition price for this property is €840,000 all-inclusive (seller net price plus commission, closing costs, and taxes), not including furniture, which will run about €20,000 to 30,000. The annual net yield is an impressive €52,000, equalling a 6% triple-net yield return on investment, all expenses included.
Paris Short-Term Rental Alternative: Mobile Leases
Mobile leases offer a more stable recurring income from their investment—with less regulatory burden than the short-term option. Known as “bail mobilité” in French, mobile leases are defined by French real estate regulations as rental agreements for a minimum duration of one month and a maximum of ten months. Mobile leases offer more flexibility than traditional leases and do not require a security deposit. They provide a legal framework that balances the needs of temporary tenants with the rights and obligations of property owners, ensuring a streamlined process for both parties.
These leases were originally designed to cater to tenants in temporary situations, such as students, interns, or individuals on short-term professional assignments. Today, many Paris visitors will grab a mobility lease for whatever duration makes sense for them.
Expected Income Levels Compared with Short-Term Rentals
The expected income from mobile leases is typically lower than for short-term rentals, but there are several advantages:
- Reduced Vacancy Risk: Long-term leases minimize the risk of frequent vacancies, providing a steady income stream throughout the year.
- Lower Administrative Burden: Managing a long-term lease requires less frequent tenant turnover, reducing the administrative tasks associated with tenant screening, check-ins, and cleanings.
- Stable Cash Flow: Long-term leases provide a predictable cash flow, which is beneficial for budgeting and financial planning.
Taxation for Non-Residents
Non-resident investors must be aware of their tax obligations. Key considerations include:
- French Income Tax: Non-residents are subject to French income tax on rental income earned in France. The tax rate is determined by the total amount of rental income and the investor’s tax bracket. French law allows for streamlined revenue reporting with a fixed tax rate that avoids the need for itemizing expenses. Paris Property Group has key financial advisors who assist our clients with these tax and financial reporting requirements.
- Double Taxation Treaties: France has double taxation treaties with many countries, which can help mitigate the risk of being taxed twice on the same income. Non-residents should consult with a tax professional to understand how these treaties apply to their specific situation.
- Wealth Tax: High-value properties may be subject to the French wealth tax, which applies to the net value of assets held in France. Non-residents should assess whether their property investments exceed the wealth tax threshold.
5 Reasons to Invest in a Short-Term Rental Property in Paris
Paris has long been a magnet for tourists and business travelers from around the world. Investing in a short-term rental property in this iconic city could yield substantial financial rewards. Here are five key reasons why:
1. High Demand
Paris attracts millions of tourists and business travelers year-round, ensuring a steady stream of potential renters. In 2019, the city welcomed over 38 million visitors1, making it one of the most visited destinations in the world. This high demand translates into potentially high occupancy rates for your short-term rental.
2. Lucrative Returns
Short-term rentals often yield higher returns compared to traditional long-term leases. According to data from Airdna, the average daily rate for short-term rentals in Paris was €122 in 20202 (and is positioned to grow year-over-year). Depending on location, amenities, and seasonality, you could potentially earn significantly more per night than with a standard lease.
3. Flexibility
Owning a short-term rental property in Paris gives you the flexibility to use it for personal stays when it’s not rented out. This means you can enjoy your own Parisian pied-à-terre while still generating rental income when you’re away.
4. Easy Management
Digital platforms, like Airbnb and Booking.com, have made it easier to manage rentals, even remotely. These platforms handle bookings, payments, and communication with guests to streamline the process for property owners. Most of our clients will opt for a local rental partner who handles both reservations and maintenance and operation for a more hands-off, high-touch approach.
Yes, You Can Own a Short-Term Rental in Paris
But there’s little available inventory these days, given that virtually no new properties are being considered for the short-term rental designation anymore. So, when the opportunity arises to purchase a property that has already been registered and approved for short-term rental use, it shouldn’t be passed up without a close look. At the end of the day, if a key component of your Paris real estate investment is to enjoy steady income and personal use, a legal, registered short-term-rental apartment is the best way to go.
Investing in a short-term rental property in Paris is a lucrative, exciting, and rewarding venture that can ultimately help you achieve your dream of owning in Paris. Understanding the opportunity, the legal landscape, and the financial obligations are key to maximizing the return on your investment over the long term. Whatever your goals may be, Paris remains an attractive market for high-value real estate investment with high returns.
Ready to explore your investment options in Paris?
> Contact PPG today to get started.
Sources
- Paris Convention and Visitors Bureau. (2020). Tourism in Paris – Key Figures 2019.
https://pro.parisinfo.com/chiffres-tourisme-paris-ile-de-france/bilans/key-figures-english-version - Airdna. (2021). Paris Short-Term Rental Market Overview.
https://www.airdna.co/vacation-rental-data/app/fr/default/paris/overview - French-Property.com. (2021). French Tax on Furnished Letting Income – FPI.
https://www.french-property.com/guides/france/finance-taxation/taxation/rental-income/furnished-letting - Paris.fr. (2021). Tourist furnished accommodation.
https://www.paris.fr/pages/meubles-touristiques-3637 - Airbnb. (2021). Occupancy tax collection and remittance by Airbnb in France.
https://www.airbnb.com/help/article/2509/occupancy-tax-collection-and-remittance-by-airbnb-in-france
