When you receive rental income from real estate, certain specific taxes may apply in addition to traditional taxation. Among them, the tax on rental income (CRL - Contribution sur les Revenus Locatifs) often remains poorly understood by landlords. However, an incorrect declaration or an omission can lead to a tax reassessment.

What does this tax on rental income actually correspond to? Which properties are affected? How does taxation under the CRL work? What is the applicable rate and how is the calculation carried out correctly? Here is a complete guide to understanding this tax and securing your rental taxation.

Definition of the tax on rental income and scope of application

The tax on rental income is a specific tax levy due by certain owners who receive rental income from the rental of real estate for professional or assimilated use. Unlike income tax or corporate tax, the CRL is an autonomous tax.

The CRL tax applies to income derived from the rental of:

• premises for professional use,

• commercial premises,

• industrial premises,

• offices or land for professional use.

In principle, it does not apply to classic residential rentals, which explains why many individual landlords are not subject to it.

Who must pay the CRL? Persons and income concerned

The tax on rental income mainly concerns landlords operating within a professional or assimilated framework. Those subject to taxation under the CRL are:

• individuals receiving professional rental income,

• partnerships subject to income tax,

• certain legal entities not subject to corporate tax.

On the other hand, corporations subject to corporate tax are generally excluded from the scope of the tax on rental income.

The income taken into account for the calculation of the CRL corresponds to the rents actually collected, excluding recoverable charges, for the taxable properties.

Amount of the CRL: applicable rate and calculation method

The CRL rate is set by law and stands at 2.5%. This rate is applied directly to the amount of gross rental income received, after excluding certain specific sums.

CRL calculation base

The CRL calculation is based on a specific assessment basis:

• Rents collected during the calendar year

• Ancillary income related to the rental

• Exclusion of recoverable charges re-billed to the tenant

Security deposits and exceptional indemnities are generally not included in the basis of the CRL tax.

Example of CRL calculation

If you receive €40,000 in annual rent for professional premises subject to the tax on rental income, the amount of the CRL will be:

€40,000 × 2.5% = €1,000

This amount is in addition to other applicable tax and social security levies.

Exemptions and cases of exemption from the tax on rental income

Not all landlords are subject to the tax on rental income. Several cases of exemption are provided for by regulations.

You are exempt from the CRL tax if:

• annual rents do not exceed €1,830,

• the property is rented for residential use,

• the owner is subject to corporate tax,

• the housing benefits from a temporary exemption in certain specific areas.

Certain agricultural or assimilated rentals may also benefit from an exemption from the tax on rental income.

Declaring and paying the CRL: procedures, deadlines and forms

The declaration of the tax on rental income follows specific rules that must be respected.

Declaration of the CRL

The CRL tax must be declared using a specific tax form, separate from the traditional income tax return. The information to be provided includes:

• the identification of the landlord,

• the nature of the rented properties,

• the amount of rents received,

• the detailed calculation of the CRL.

Payment deadlines

The payment of the tax on rental income generally occurs at the same time as the declaration, according to the current tax calendar. Any delay or omission can lead to:

• surcharges,

• late payment interest,

• a tax audit.

It is therefore essential to anticipate the taxation under the CRL in your rental management.

Properties and rentals excluded from the scope of the CRL

The tax on rental income does not apply to all real estate properties. The following are notably excluded:

• housing rented for primary residential use,

• furnished rentals for residential use,

• rentals subject to corporate tax,

• rentals exempted by a specific legal provision.

These exclusions explain why the CRL tax mainly concerns investors holding professional or mixed premises.

Common errors and points of vigilance related to the tax on rental income

The tax on rental income gives rise to numerous errors, often linked to a poor understanding of its scope of application.

Among the most common errors:

• confusing the CRL with social security contributions,

• forgetting to declare the CRL tax,

• applying an incorrect CRL rate,

• integrating exempt rents in the CRL calculation,

• neglecting exemption thresholds.

Poor management of taxation under the CRL can have a direct impact on the profitability of your rental investment. Hence the benefit of seeking support or outsourcing tax management to a professional property manager.

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