The Cotisation Foncière des Entreprises (CFE), commonly referred to as French business property tax, is a local tax that may apply to owners of furnished rental properties in France, including those operating under Non-Professional Furnished Rental Landlord (Loueur en Meublé Non Professionnel or LMNP) status. Unlike property ownership tax (taxe foncière), which is linked to owning real estate, CFE is associated with carrying out an activity considered commercial for French tax purposes. Both professional furnished rental landlords (LMP) and non-professional landlords (LMNP) may therefore be liable for this tax, subject to applicable exemptions. Several situations may qualify for exemptions, particularly when rental receipts during the relevant reference period do not exceed €5,000, with an exemption from the minimum CFE contribution, or when part of a personal residence is rented out occasionally. Specific exemptions may also apply to furnished rooms rented within a primary residence or certain furnished tourist accommodation. In principle, CFE is not payable during the calendar year in which the rental activity is established, and the taxable base generally benefits from a 50% reduction in the following year. The amount payable depends on the municipality, locally determined tax rates, the taxable rental value of property used for the activity and any applicable minimum contribution. When starting a furnished rental business, landlords must register their activity through the French business formalities portal to obtain a SIRET identification number and submit an initial CFE declaration using form 1447-C-SD, generally by December 31 of the year in which the activity begins. CFE tax notices are available through the professional account on impots.gouv.fr, and payment is generally due by December 15. Under the micro-BIC tax regime, CFE cannot be deducted separately from rental income because expenses are covered by a standard tax allowance. Under the actual expenses regime (régime réel), CFE is generally deductible from taxable furnished rental profits. If a tax notice contains an error, landlords can contact their business tax office and submit a formal claim under the applicable procedures. To anticipate the tax implications of a rental investment, property owners should check available exemptions, reporting obligations, payment deadlines and expense deduction rules. Specializing in furnished rentals and rental property management, Lodgis supports landlords with rental price estimates, tenant searches and property management in Paris and major French cities.
Do you own a furnished apartment that you rent out? In addition to income tax on your rental earnings and annual property tax, you may be liable for another tax: the Cotisation Foncière des Entreprises (CFE), or French business property tax.
Despite its name, this tax does not apply exclusively to companies. Individuals who rent out furnished accommodation may also have to pay it, even if they do not consider themselves real estate professionals.
Fortunately, several exemptions are available, particularly when rental receipts are relatively low or during the first year of activity.
Who must pay French business property tax in 2027? How is the amount calculated? What exemptions are available, and what administrative procedures must landlords complete?
Discover the main rules to help you anticipate the taxation of your furnished rental property.
The Cotisation Foncière des Entreprises is a local tax paid by individuals and entities carrying out certain business activities, including activities undertaken in an individual capacity.
Even if you are a private individual, regularly renting out furnished accommodation is considered a commercial activity for French tax purposes.
You may therefore be liable for CFE whether you own a single rental apartment or several furnished rental properties.
This tax should not be confused with the annual property ownership tax:
A landlord may therefore have to pay both taxes for the same property.
No, not automatically.
When an individual rents out furnished accommodation, they generally fall under Non-Professional Furnished Rental Landlord (LMNP) status, provided they meet the relevant tax conditions.
This status means that they are not considered a professional furnished rental landlord for the taxation of rental income.
However, the distinction between professional and non-professional activities does not apply in the same way to CFE.
A landlord with LMNP status may therefore be liable for this tax, just like a Professional Furnished Rental Landlord (LMP).
Whether the rental activity is considered professional for income tax purposes does not, in itself, determine whether CFE must be paid.
Not all owners of furnished rental properties are necessarily required to pay this tax.
French regulations provide several exemptions, depending on factors including rental receipts, the nature of the property and the rental arrangements.
Landlords whose annual receipts do not exceed €5,000 during the relevant tax reference period may qualify for an exemption from the minimum CFE contribution.
This provision can be particularly beneficial for landlords receiving relatively low rental income.
Example:
You rent out a small furnished apartment and receive €4,800 in annual rental receipts.
If this amount corresponds to the receipts assessed for the relevant reference period and your CFE liability is calculated using the minimum taxable base, you may qualify for the exemption.
Important: the tax authorities use a reference period that does not necessarily correspond to the current calendar year. In some situations, receipts may also be annualized when the activity starts partway through a year.
A property owner may also qualify for an exemption when occasionally renting out part of their personal residence on a non-recurring basis.
This exemption may concern a primary or secondary residence.
However, rentals that are renewed regularly, particularly every year, may not meet the conditions required for an occasional rental exemption.
A landlord renting out part of their primary residence may also qualify for an exemption when the tenant uses the accommodation as their primary residence and the rent does not exceed the levels considered reasonable by the French tax authorities.
This may apply, for example, to an owner renting a furnished room in their home to a student.
The applicable reasonable rent thresholds are updated periodically and vary according to the property's location.
Renting out all or part of a personal residence as furnished tourist accommodation may also qualify for an exemption.
However, the relevant local authority may adopt a decision removing this exemption.
It is therefore important to check the rules applicable in the municipality where the property is located.
Yes. In principle, CFE is not payable for the calendar year in which the rental activity is established.
This exemption allows landlords starting a furnished rental activity to avoid paying this tax immediately.
Example:
You start renting out your furnished apartment in September 2027.
Provided this date is considered the creation date of your activity for tax purposes:
Important: this exemption does not mean that no administrative procedures are required.
Even if no CFE is payable during the first year, you must still submit your initial declaration to the French tax authorities.
Unlike certain taxes with uniform rates throughout France, the amount of CFE depends in particular on the municipality in which the activity is taxed.
The calculation is primarily based on two elements:
CFE may be calculated using the cadastral rental value of properties subject to property tax and used for the business activity.
This value is determined according to specific tax rules and does not necessarily correspond to the rent actually received by the landlord.
When the taxable base is low, or in certain other circumstances, a minimum CFE contribution may apply.
This minimum contribution is calculated using a locally determined taxable base within the limits established by law.
The amount can therefore vary from one municipality to another.
Consider two landlords who each rent out a furnished apartment.
Even if they receive similar rental income, they may pay different amounts of CFE if their properties are located in different municipalities.
This difference may be explained by locally determined tax rates and minimum taxable bases.
There is therefore no single CFE amount applicable to all furnished rental landlords in France.
When starting a furnished rental activity, property owners must complete several tax-related formalities.
The first step is to register the start of the furnished rental activity through the French business formalities portal (guichet unique), generally within 15 days of beginning the activity.
This procedure allows landlords to obtain a SIRET number, which is an identification number assigned to each business establishment.
This number is used for various tax and administrative procedures.
Landlords must also submit an initial declaration to the French tax authorities.
This is done using form 1447-C-SD.
The form provides the information needed to calculate the tax and allows landlords to indicate any circumstances that may qualify them for an exemption.
It must generally be submitted by December 31 of the year in which the activity begins.
No. The initial declaration does not normally need to be resubmitted annually if the landlord's circumstances remain unchanged.
However, certain changes must be reported to the tax authorities.
These may include changes to the property's floor area, changes in the rental activity or an application for a specific exemption.
In such cases, an amended declaration may be required.
French business property tax notices can be consulted and paid directly through the official French tax website.
Unlike personal income tax notices, CFE notices are available through the taxpayer's professional online account.
Even when carrying out furnished rental activity on a non-professional basis for income tax purposes, landlords must have a professional account on impots.gouv.fr to consult and pay this tax.
This account allows landlords to:
CFE is generally payable by December 15 each year, subject to adjustments in the official tax calendar.
For certain taxpayers with a substantial tax liability, an advance payment may also be required in June.
Payment must be made electronically, using the methods provided by the French tax authorities.
The tax treatment of CFE depends on the tax regime selected by the landlord.
Income from furnished rentals is taxed under the Business Income category (Bénéfices Industriels et Commerciaux or BIC).
Under the micro-BIC regime, expenses are accounted for through a standard tax allowance.
CFE therefore cannot be deducted separately from rental receipts.
The actual expenses regime allows qualifying costs genuinely incurred for the rental activity to be deducted, subject to the applicable tax conditions.
CFE is generally a deductible expense when calculating taxable profits from furnished rentals.
Example:
A landlord receives €15,000 in annual rental income and pays €400 in CFE.
If the landlord uses the actual expenses regime, this tax may reduce the taxable profit from the rental activity, alongside other qualifying expenses.
This potential deduction is worth considering when comparing the different tax regimes.
A landlord may receive a CFE tax notice even though they believe they qualify for an exemption, or they may notice an error in the calculation.
In this situation, several checks are recommended.
Start by checking:
If you identify an error, you can request clarification from the French business tax office (Service des Impôts des Entreprises or SIE) responsible for your activity.
It is advisable to explain your circumstances clearly and provide the necessary supporting documents.
If you believe that the tax assessment is unjustified, you may submit a formal claim within the applicable deadlines.
Important: submitting a claim does not automatically suspend the obligation to pay. A payment deferral may be requested under the conditions established by French regulations.
CFE is one of the expenses that landlords should consider when assessing the profitability of a furnished rental property.
Although it may seem relatively minor compared with annual rental income, it represents an additional cost that can vary according to the property's location.
Before investing or renting out your apartment, it is therefore advisable to:
Planning ahead makes it easier to assess the costs associated with furnished rentals and avoid unexpected tax expenses.
Specializing in furnished rentals and rental property management, Lodgis supports landlords with renting out their properties and maximizing the value of their real estate assets.
Whether you want to rent out your first furnished apartment or expand your rental property portfolio, our teams can assist with estimating the rent, finding tenants and, depending on the package selected, managing your accommodation on a daily basis.
By relying on Lodgis' real estate expertise, you benefit from assistance tailored to your investment project.
Would you like to rent out your furnished apartment? Contact the Lodgis team to discover our rental and property management services.
Yes, in principle. Regularly renting out furnished accommodation may result in an obligation to pay CFE, even when the landlord is a private individual. However, several exemptions are available.
No. Non-Professional Furnished Rental Landlord (LMNP) status does not automatically provide an exemption from CFE. Whether the tax is payable depends on the activity and any applicable exemptions.
Taxpayers whose receipts do not exceed €5,000 during the relevant reference period may qualify for an exemption from the minimum CFE contribution, subject to the applicable conditions.
No. In principle, CFE is not payable during the year in which the activity is established. However, the initial declaration remains mandatory.
Yes. These two taxes have different purposes. Taxe foncière relates to property ownership, while CFE is associated with carrying out a business activity.
CFE tax notices are available in the taxpayer's professional account on the official French tax website, impots.gouv.fr.
Yes, in principle, if the landlord uses the actual expenses regime. Under the micro-BIC regime, expenses are covered by a standard allowance and cannot be deducted individually.
The tax situation must be assessed according to how the rental activity is organized, where the properties are located and the rules applicable to each establishment. It is advisable to confirm the reporting requirements with the French tax authorities to avoid incorrect declarations.
French business property tax (CFE) on furnished rentals is an important expense that many landlords must take into account, even when they operate on a non-professional basis.
The amount payable depends in particular on the municipality and the taxable base determined by the French tax authorities. However, several exemptions may apply, including situations involving low rental receipts or the first year of activity.
For landlords, the essential steps are to assess their tax situation, complete the required declarations and include this expense when calculating rental profitability.
Understanding these obligations helps property owners manage their furnished rental investments with greater peace of mind.
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