France is the second-largest market for Airbnb, with listings in more than 29,000 towns and cities in the country.

The National Assembly lower house adopted the legislation by a large majority, with the far right voting against.

The bill — the result of a compromise between the two houses of French parliament — had been unanimously approved by the upper house Senate on Tuesday.

Airbnb said it regretted the new restrictions because of their impact on hosts, although it expected no major effect on its own business.

“We regret the inclusion of additional measures that will burden everyday families with additional tax costs and bureaucracy,” the company said in a statement to AFP.

The legislation, which has been in the works since April 2023, aims to slash tax breaks for tourist properties in a bid to curb short-term rentals amid shortages of affordable housing.

The bill’s backers say that the boom in Airbnb-type rentals has contributed to encouraging speculation, and made access to conventional housing harder.

“Restoring the primary function of housing is our only goal”, said Annaig Le Meur, one of the lawmakers behind the bill.

‘Housing crisis’

Lawmaker Inaki Echaniz pointed to “a housing crisis” and “an explosive increase in the number of furnished tourist accommodation, which has risen from 300,000 to 1.2 million in eight years.”

The tax allowance for furnished tourist accommodation would fall to 50 percent from 71 percent, with a cap lowered to 77,700 euros (83,500 dollars).

The legislation would slash tax breaks for non-classified tourist properties to 30 percent from 50 percent, with a cap of 15,000 euros.

The legislation also gives mayors a “toolbox” to regulate short-term accommodation, Echaniz said in a statement.

It will be possible to cut the rental durations of primary residences to 90 days a year from 120 days now.

Local authorities will also be able to set quotas for furnished tourist accommodation.

“Hundreds of mayors, from Paris to Biarritz, from Annecy to Saint-Malo, are impatiently awaiting this proposed law,” said Laurent Lhardit, lawmaker and deputy mayor of Marseille.

In Marseille, “we are ready to deliberate as soon as the law is promulgated to apply the strictest regulations in France in this area,” added the Socialist MP.

Far-right lawmakers denounced the legislation, slamming an “outrageous and punitive tax system.”

The law will “favour the giants of the hotel sector to the detriment of those who simply want to earn a supplementary income from their property,” said Alexis Jolly, a member of the National Rally.

Airbnb said it was already working with more than 350 towns and cities across France “to enforce local rules”

“We want to work with municipalities to ensure that new powers are leveraged where there is a clear need and trackable impact,” it added.

Representatives of the hotel industry welcomed the move.

“The new law takes up measures that the tourism industry has been advocating for a long time in order to improve the regulation of furnished holiday accommodation,” the CAT and ADN Tourisme federations said in a statement.

The measures, they added, would guarantee “the diversity and quality of the accommodation on offer, which is so important in terms of attracting tourists to our regions”.