What holiday rental owners really need to know
With recent tax changes, many homeowners are wondering whether they should pay :
- the CFE (Cotisation Foncière des Entreprises),
- the Council tax on second homes (THRS),
- or sometimes both.
Online discussions often add to the confusion. So here is a clear, up-to-date version, based on the ministerial responses of 3 June 2025 and current tax doctrine.
1️⃣ CFE and THRS: two different taxes for two different purposes
✔ CFE
The CFE concerns furnished lettings.
It is payable by anyone operating a furnished property, including those operating a LMNP scheme.
There are, however, some possible exemptions:
- rental income < 5,000 per year,
- 1st year in business,
- exemptions decided by the municipality,
- specific zones (FRR).
✔ THRS (Council tax on second homes)
THRS applies if the owner retains the right of use on 1 January.
That's the crux of the matter:
👉 It's not the number of days rented that counts,
👉 But the possibility of using the accommodation, even rarely.
If you are free to dispose of it, even theoretically, THRS is due.
2️⃣ Yes: CFE and THRS can be applied simultaneously
This is even the situation the most common as a seasonal LMNP.
The two taxes are not linked:
- CFE taxes the activity,
- THRS taxes the use of the property.
3️⃣ Can I avoid paying council tax (THRS)?
Yes, in just one case:
👉 if the owner does not retain the use of the property at all.
And this can only be the case :
✔ If the dwelling is entrusted in EXCLUSIVE MANAGEMENT MANDATE
to a professional holder of the G (Hoguet law).
This is the only situation recognised by the tax authorities in which :
- the owner can no longer use the property,
- personal use is contractually impossible,
- enjoyment is transferred to the property manager.
👉 So :
Without a G card = inability to sign an exclusive mandate = the THRS remains due.
4️⃣ What you can't get from a concierge service without a G Card
A concierge service like CLM :
- does not manage rents,
- does not draw up a lease,
- cannot be a rental agent,
- does not have the legal personality to withdraw use from the owner.
This means that :
❌ It cannot not make you eligible for exemption from THRS.
✔ On the other hand, it can help you understand your LMNP obligations.
This is essential to avoid any ambiguity for owners.
5️⃣ Common mistakes on the internet (and corrections)
❌ “If I rent for 120 days or more, I no longer have to pay council tax.”
➡️ False.
The 120 days concern the registration number, not THRS.
❌ “You have to rent 365 days to avoid THRS.”
➡️ False.
It's not the activity that counts,
but the impossibility of personal use.
❌ “A concierge service can act as an exclusive agent.”
➡️ False if she does not have a G card.
(This is the case for almost all concierge services in France).
6️⃣ What CLM can actually do (and what the law forbids)
CLM can :
- explain the THRS / CFE rules to you,
- help you understand your LMNP obligations,
- help you organise your rental property,
- managing the operation and quality of housing,
- optimise your income,
- help you with your administrative formalities non-financial,
- advise you objectively on your options.
CLM cannot :
- manage your rent,
- sign a rental management agreement,
- withdraw use of the property,
- make you eligible for THRS exemption.
This is a legal requirement under the Hoguet Act.
7️⃣ Clear summary: who pays for what?
| Situation | CFE | THRS |
|---|---|---|
| Owner retains use of the property | ✔ Yes | ✔ Yes |
| Owner waives use (exclusive mandate Carte G) | ✔ Yes | ❌ No |
| Income < €5,000/year | ❌ No | ✔ Yes if used |
| Rental of part of the principal residence | ❌ No | ❌ No |
| Concierge service without a G card | ✔ Possible management | ✔ THRS due |
8️⃣ Conclusion
In most cases for holiday lets:
- CFE is payable (with possible exemptions),
- THRS is payable as soon as the owner is able to use the property,
- only an exclusive mandate entrusted to a professional Carte G can be used to remove this THRS.
CLM can help you understanding your obligations, We'll help you optimise your LMNP tax position and manage your business with peace of mind - while complying strictly with the Hoguet Act.
