Garage, Box, or Parking Space Rental: Taxation on Income, Property Tax, and VAT Explained

According to a study by the real estate ad site SeLoger, dating from 2020, investing in a parking space offers a gross rental return of 10.4% in Strasbourg, 6.8% in Grenoble or 4.7% in Lyon . To these figures, the taxation linked to the rental of the garage must be applied.

Rents to be declared to taxes

The rents that you receive as part of the rental of your garage or your parking space are taxed in the category of property income when the rental is not accompanied by any service or provision other than simple caretaking.

Under the micro-land regime, the lessor benefits from a 30% reduction on the rents collected. If their amount exceeds €15,000 per couple, then the actual tax regime applies.

If the rental is supplemented by services such as washing or maintenance, the rents are considered as rental income. These are then taxed on income in the category of industrial and commercial profits (BIC). The micro-BIC regime (offering a 50% reduction on rental income) or the real regime apply.

Property tax payable

Property tax on Built Properties (TFPB) applies to owners with a garage or parking space.

Re council tax, a tenant who lives less than 1 km from the rented garage is liable for this tax. But following a government reform, the housing tax is abolished this year with regard to the main residence. Thus, he no longer has to pay it.

Payment of VAT

The rental of a garage or a parking space is subject to VAT at the rate of 19.60%, whether it is an individual garage, a box, a parking space ground, and regardless of the frequency of rental.

But two exceptions exist. If the garage is rented at the same time as the accommodation to which it is attached, and the latter is not subject to VAT (rented without provision of services), then the garage is not subject to it.

Another exception: if the amount of rent received does not exceed €34,400 excluding tax in 2022, the lessor benefits from a VAT exemption.

A property that enters into the calculation of the ID+FI

Real estate wealth tax (IFI) takes into account all property and real estate rights held directly and indirectly by all the persons making up the tax household. These include houses, apartments and outbuildings such as garages or parking lots.

A lessor whose net value of its real estate assets exceeds 1.3 million euros on 1^is January of the tax year may thus be subject to the IFI.

A capital gain taxed in the event of resale

If the lessor sells his parking space, real estate appreciation realized will be subject to tax (at a total rate of 36.2%). But he can benefit from a total exemption if the sale price of the garage does not exceed €15,000 or after 30 years of ownership of the property.

In the event of the sale of his main residence and its outbuildings, such as a garage or a cellar, the capital gain is also completely exempt.