What is the LMNP status?
The Loueur en Meuble Non Professionnel (LMNP) status -- Non-Professional Furnished Landlord -- allows individuals in France to rent out a furnished property while benefiting from a highly advantageous tax framework. It is one of the most effective schemes for reducing, or even eliminating, tax on rental income.
To qualify for the LMNP status, two cumulative conditions must be met: annual rental receipts must be less than 23 000 euros and must represent less than 50% of the household's professional income. Beyond these thresholds, you move into the Loueur en Meuble Professionnel (LMP) regime, with different tax implications.
Micro-BIC or actual expenses regime: which to choose?
LMNP offers two tax regimes. The micro-BIC is the simplest: it applies automatically if your receipts do not exceed 77 700 euros per year. You benefit from a flat-rate allowance of 50% on your rental income (30% for unclassified furnished holiday rentals since 2024).
The simplified actual expenses regime (regime reel simplifie) allows you to deduct real charges and, most importantly, to apply accounting depreciation on both the property and furniture. This is generally the most advantageous regime once the property is financed with a mortgage.
Let us compare on a property generating 12 000 euros in annual rents:
- Micro-BIC: taxable income = 12 000 x 50% = 6 000 euros. At a marginal tax rate of 30% + social contributions of 17.2%, the tax amounts to 2 832 euros.
- Actual expenses regime: after deducting charges (3 000 euros) and depreciation (6 500 euros), taxable income can fall to 2 500 euros, or even zero. Tax can be reduced to 1 180 euros, or even 0 euros.
The saving under the actual expenses regime easily reaches 1 500 to 2 832 euros per year in this example.
Depreciation: the heart of the scheme
Accounting depreciation is the centrepiece of the actual expenses regime under LMNP. It allows you to deduct each year a fraction of the value of the property and furniture, without any actual cash outflow. It is a purely accounting charge that reduces taxable income.
The property is depreciated by component:
- Structural work (40% of the value) over 50 years, i.e. 0.8% per year
- Roofing (10%) over 25 years, i.e. 0.4% per year
- Technical installations (20%) over 15 years, i.e. 1.33% per year
- Interior fittings (20%) over 15 years, i.e. 1.33% per year
- Facade (10%) over 30 years, i.e. 0.33% per year
The land (estimated at 15-20% of total value) is not depreciable.
For an apartment valued at 200 000 euros (of which 170 000 euros is depreciable), total annual depreciation is approximately 5 500 to 6 500 euros. The furniture (estimated at 5 000 euros) is depreciated over 5 to 10 years, adding 500 to 1 000 euros of additional depreciation.
Deductible charges under the actual expenses regime
Beyond depreciation, many charges are deductible under the actual expenses regime:
- Loan interest and associated bank charges
- Property tax (taxe fonciere, excluding the waste collection tax which is recoverable from the tenant)
- Non-recoverable co-ownership charges
- Non-occupying owner insurance (PNO) and rent guarantee insurance (GLI)
- Management fees (letting agency, accountant)
- Maintenance and repair works
- Notary fees (depreciable or deductible in the first year)
The combination of depreciation and actual charges frequently creates a BIC deficit that completely eliminates tax on rental income. This deficit can be carried forward against income of the same category for 10 years.
Complete example over 10 years
Take a studio purchased for 120 000 euros all-in, rented furnished at 600 euros per month to a student. The property is financed with a 25 000 euro deposit and a 95 000 euro loan over 20 years at 3.4%.
Annual income: 7 200 euros. Annual charges (interest + property tax + insurance + accountant + miscellaneous): approximately 4 200 euros in the first year. Annual depreciation: approximately 3 500 euros.
Tax result: 7 200 - 4 200 - 3 500 = -500 euros (deficit). Tax: 0 euros.
Over the first 10 years, the tax result remains nil or very low thanks to depreciation, generating cumulative tax savings of 15 000 to 20 000 euros compared to unfurnished letting under the standard property income regime (revenus fonciers).
Obligations and tax filing
The LMNP status imposes certain administrative obligations:
- Registration with the commercial court registry (greffe du tribunal de commerce) using form P0i to obtain a SIRET number
- Keeping accounts that comply with the actual expenses regime (balance sheet, income statement)
- Filing BIC income on form 2031 and associated schedules
- Joining an approved management centre (CGA) is recommended to avoid the 15% surcharge on taxable profit
Using an accountant is strongly advised, indeed almost essential. Fees (between 300 and 600 euros per year) are themselves deductible and are easily offset by the tax savings achieved.
Regulatory changes to watch in 2026
The 2025 Finance Act introduced significant changes to the LMNP regime, notably the reintegration of depreciation into the capital gains calculation on resale for certain categories of property. This measure reduces the tax advantage at exit and must be factored into your long-term holding strategy. Consult a professional to assess the impact on your personal situation.