An additional 18 months for renting out part of one’s primary residence

The 2024 Finance Act extends the income tax exemption program for an additional 18 months for individuals who rent out or sublet one or more rooms in their primary residence.

Individuals who rent or sublet a furnished portion of their primary residence are eligible for a tax exemption on the income from that rental in two specific situations, provided they meet certain conditions.

First, the units must not serve as the tenant’s primary residence, and the income generated by these rentals must not exceed €760 (including tax) per year;

Furthermore, when the rented premises serve as the tenant’s or subtenant’s primary residence (or as a temporary residence if the tenant is a seasonal worker), and the rent is set within reasonable limits. 

The applicable amounts for 2024 will be announced in the spring.

It is important to note that in 2023, the annual rent caps per square meter of living space, excluding utilities, were set at 199 euros in the Île-de-France region and at 147 euros in other regions. While these tax exemption measures were initially intended to apply to leases or subleases entered into through July 15, 2024, the Finance Act extends these two provisions through December 31, 2026 (rather than through the end of 2027, as initially proposed in the bill). According to the bill’s drafters, this extension aims to facilitate access to housing by encouraging intergenerational cohabitation based on mutual support.