Paris is one of the top tourist destinations in the world, attracting over 30 million visitors per year. With such high tourism demand, short-term rentals like Airbnb have become increasingly popular in the French capital. For property investors, Paris short-term rentals can provide excellent returns and strong occupancy rates. This guide from UpperKey covers everything you need to know about investing in Paris holiday rentals by answering some commonly asked questions.
Are short-term rentals allowed in Paris?
Yes, short-term rentals are legal in Paris. However, there are some regulations in place that owners need to be aware of:
· Entire homes can only be rented out for 120 days per year. This is to avoid properties being taken off the long-term rental market.
· Home sharing (renting a room while the owner is present) is not subject to the 120-day limit.
· Hosts must register with the local town hall and display their registration number in listings. There is also a tourist tax to be paid.
Ensuring you follow all the correct rules and regulations is important for running a legitimate and compliant Airbnb business in Paris.
Why do people like short-term rentals?
Guests choose holiday rentals over hotels for many reasons:
· More space and amenities like kitchens and washing machines
· Ability to live like a local in a residential apartment
· Lower cost compared to equivalent hotel suites
· Self check-in flexibility without front desk restrictions
· Unique locations unavailable elsewhere like historic buildings
· Experiencing authentic neighbourhoods and local culture
Short-term rentals allow travellers to truly immerse themselves in a destination, rather than just visiting briefly as a tourist. By staying in a real Parisian apartment, guests get to shop at little local markets, eat at cafes the locals frequent, and gain insight into the Bohemian Parisian lifestyle. Wandering side streets reveals a different view of the city rarely seen. This appeals greatly compared to anonymous chain hotels situated in crowded tourist areas. Living among Parisians offers a special travel experience many short-term rental guests crave.
Is Paris a good place to invest in property?
With high tourism demand and property prices rising over the last decade, Paris real estate has proven a strong investment. Factors making it favourable include:
· Mass tourism is driving occupancy - the city sees 30 million visitors per year
· There is a shortage of hotels and accommodation to meet tourism demand
· High rents and rising prices provide capital growth
· Strong protections in place for landlords and an established rental market
The prime central arrondissements like 1st, 4th, 5th and 6th are ideal areas for investors to target.
Can a foreigner own an apartment in Paris?
Yes. There are no restrictions on foreigners purchasing real estate in Paris. The process involves:
· Securing finance as a non-French resident
· Setting up a French bank account
· Finding and making an offer on the property
· Signing a purchase agreement at the notary
It’s advisable to engage a bilingual real estate agent and lawyer to help navigate the buying process.
Be aware that buying costs are high at around 7% of the purchase price. Capital gains tax also applies for non-residents.
How do I start an Airbnb in Paris?
The key steps to starting a Parisian Airbnb include:
· Research the best area to buy based on rental demand, prices, and returns
· View listings and make an offer on a suitable investment property
· Finance the purchase as a foreign investor
· Furnish the apartment appropriately for holiday lets
· Photograph the property, create the Airbnb listing and calendar
· Implement a pricing strategy based on seasonal demand
· Add house rules, terms and conditions
· Manage bookings, check-ins, cleaning and maintenance
Utilising a property management company like UpperKey can help look after guest communications, cleaning, and key handovers.
Where is the best place to invest in Paris?
The 1st arrondissement tops the list for Paris Airbnb investment. Other popular areas include Le Marais, Saint Germain des Prés, Montmartre, and neighbouring arrondissements like 10th and 11th.
When deciding, consider things like:
· Airbnb demand and occupancy rates
· Tourist sites, attractions, transport links
· Rental yields in the area
· Future capital growth potential
Central locations near Metro stations generally perform best. Proximity to cafes, restaurants and shops is also ideal.
How much do you make on Airbnb in Paris?
Paris Airbnb yields average around 2-5% for long-term rentals. However, short-term Airbnb returns are far higher. According to data company AirDNA, Parisian whole apartments yield over 9% on average. Top performing Airbnbs can make well over €8,000 per month in the peak summer season.
By buying an apartment in a popular central location at the right price, yields of 6-10% per year are possible. Deduct your expenses and financing costs, and €3,000 - €5,000 monthly income is feasible at current market prices.
What is a good ROI for short-term rental?
A good target is for short-term rental returns to beat 8% per year. The best Paris Airbnbs achieve over 10%. This factors in average occupancy rates around 70-80% in strong locations.
For your ROI calculation:
· Annual Revenue – Operating Costs = Annual Profit
· Annual Profit / Total Property Cost x 100 = ROI %
How is Airbnb income taxed in France?
Income tax is due on Airbnb rental profits in France. This is done via self-assessment reporting under the Micro BIC scheme.
You declare revenue minus deductible expenses like cleaning, guest supplies and agency fees. 50% of the balance is then assessed as taxable income.
French social charges of €800-€3000 also apply depending on income level. Accounting help is advisable given the complexity.
Does France plan to close the tax loophole benefiting Airbnb?
The French government has announced plans to increase tax enforcement on short-term rental platforms like Airbnb. Currently, many hosts don’t declare their rental income, which costs the state significant tax revenue.
Proposed measures likely to come into effect by 2024 include:
· Income tax payments withheld by platforms before host payouts
· Platforms reporting host ID and income data directly to the tax department
This will make it much harder for Airbnb hosts to hide income and avoid paying tax going forward.
With all this in mind, you may want to partner with a property management company if investing in a Paris holiday rental is something you would like to do. Companies like UpperKey can assist hosts by:
· Finding the right property with rental investment potential and organising viewings
· Project managing any required renovations and decor installation
· Creating eye-catching listing photos, ad copy and boosted online exposure
· Managing all guest communications before, during and after each stay
· Conducting check-ins/outs, cleaning, and key handovers
· Providing 24/7 support for any guest or property issues
· Optimising pricing rates based on demand forecasts
· Handling all accounting, payments and regulatory compliance
Using an established local provider gives peace of mind that your investment is well cared for and maximising profitability while you focus on other endeavours. With strong potential returns on offer, the expenditure is well justified.
Despite some regulatory challenges, Paris remains a top global city for short-term rental investing. Strong tourism demand, excellent occupancy prospects and high returns make a Paris Airbnb an appealing business. Targeting a central location, focusing on yield optimisation and utilising property management assistance from UpperKey can allow investors to realise profitable income potential.