When lessors of a furnished accommodation in France are non-resident taxpayers for income tax purposes, the income derived from the furnished rentals is subject either to social security contributions applicable to the self-employed (“cotisations sociales”) or to social security contributions on income from personal assets and investment products (“prélèvements sociaux”), or in some cases both.
Income and capital gains from the sale of a furnished accommodation are considered as capital income (income from assets or investment income) which, as such, is in principle subject to social security contributions on income from assets and investment products (general social contribution or CSG, contribution to the reimbursement of the social debt or CRDS and solidarity levy) collected by the tax authorities at the same time as income tax.
Nevertheless, if rental income exceeds 23.000 euro per year, the income derived from the furnished rentals may fall within the scope of the social security contributions applicable to the self-employed collected by the Urssaf (the social security contribution collection agency), according to a rule slightly modified by Law 2020-1576 of 14 December 2020, applicable to income received as of 1 January 2021. It is also compulsory to affiliate to the social security regime of the self-employed.
Two main exemptions are worth noticing.
Taxpayers affiliated only in another EU/EEA country or in Switzerland (according to regulation (EC) N° 883/2004) should neither pay the CSG and CRDS on income from assets and investment products (but they are subject to the 7,5 % social levy) nor, it seems, affiliate to the social security regime of the self-employed and pay the contributions collected by the Urssaf.
Taxpayers affiliated in another country cannot escape the payment of the CSG and CRDS on income from assets and investment products : the global levy rate, including the social levy, amounts to 17,2 %. Regarding the affiliation to the social security regime of the self-employed and payment of the contributions collected by the Urssaf, an exception might derive from the bilateral social security agreement between France and the country of affiliation.
Let us add that there are some arguments to support that :
- the social security contributions of the self-employed should not apply to capital gains from the sale of a furnished accommodation,
- (with less certainty) the social levies on assets and investment products should not apply to income derived from the furnished rentals.
More details may be found in the article published in the French version of this website.
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