The LMNP status (Non-Professional Furnished Rental) remains one of the most commonly used tax frameworks for furnished rental investment in France in 2024. The system is based on two distinct thresholds that many guides confuse, and a recent reform regarding the treatment of depreciation upon resale significantly changes the profitability calculation. Here’s what you need to know before getting started.
Reintegration of LMNP Depreciation upon Resale: What Changes Practically
Most content on LMNP presents property depreciation as a tax lever without any downside. This has been inaccurate since 2025. Archipel Lyon reminds us that deducted depreciations are now reintegrated into the calculation of capital gains upon resale. This modification requires investors to think about the holding period, exit strategy, or transfer from the moment of purchase.
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Specifically, an investor who depreciates their property over ten years under the real regime reduces their taxable base on rents each year. However, at the time of sale, the taxable capital gain increases by the total amount of depreciation claimed. The annual tax benefit is therefore not eliminated, but it is partially deferred to the exit.
For those considering a long-term holding (over twenty years), the progressive allowance on real estate capital gains may offset this reintegration. For a medium-term resale, the calculation should be done before acquisition, not after. You can read all about real estate investment on Bâtir Architecte to delve deeper into the tax mechanisms of the system.
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LMNP Threshold and Micro-BIC Ceiling: Two Figures Not to Confuse
The LMNP status is conditioned by a threshold of €23,000 in annual revenue. The rents received must not exceed this amount, and they must remain below the other professional income of the tax household. Beyond this, the landlord automatically switches to LMP (Professional Furnished Rental), with different social and tax consequences.
The micro-BIC ceiling for traditional furnished rentals is set at €77,700 excluding tax in annual revenue. This ceiling determines access to the simplified regime (flat-rate allowance), not the status itself. An investor can therefore receive €50,000 in rents, remain in LMNP (if their other income is higher), and choose between micro-BIC or the real regime.
The confusion between these two thresholds leads some investors to believe that they lose the LMNP status as soon as they exceed €23,000, whereas it is the comparison with the overall income of the household that matters.
Micro-BIC or Real Regime: Choice Criteria in 2024
The micro-BIC applies a flat-rate allowance on revenues. The real regime allows for the deduction of actual expenses (loan interest, work, management fees, property tax) and depreciation of the property and furniture. The real regime becomes more advantageous as soon as the deductible expenses exceed the amount of the flat-rate allowance.
- The micro-BIC is suitable for properties without loans, with few expenses, and where revenues remain modest.
- The real regime is necessary when the investor finances with credit, as loan interest and depreciation significantly reduce the taxable base, sometimes to zero for several years.
- Switching from micro-BIC to real is possible each year, but returning to micro-BIC after opting for real is subject to a time frame.
Deficit in LMNP under the Real Regime: A Mechanism Often Misunderstood
Under the real regime, when deductible expenses exceed rental income, LMNP generates a deficit. This deficit cannot be offset against the overall income of the household (unlike LMP in some cases). It is only transferable to income of the same nature for ten years.
This limitation means that an investor in LMNP who incurs a rental deficit will not see their income tax decrease directly. The deficit will reduce the taxable rents in subsequent years. For a heavily financed property, the first few years often generate a zero or negative fiscal result, deferring taxation without eliminating it.
Common Pitfall in LMNP Accounting
The real regime requires complete accounting: balance sheet, income statement, tax package. This obligation incurs costs (specialized accountant, membership in an approved management center). The annual cost of LMNP accounting varies depending on the providers, and it must be included in the calculation of net profitability. Some investors discover this item after purchase, which skews their initial projection.
Furnished Rental LMNP: What Type of Lease and What Obligations
The lease for a furnished property under LMNP is a minimum of one year (nine months for a student). The tenant can terminate with one month’s notice. The landlord can only terminate at the end of the lease, with three months’ notice and a legitimate reason.
The property must comply with a specific list of furniture and equipment defined by decree. A property that does not meet this list can be reclassified as an unfurnished rental, which results in the loss of the BIC tax regime and shifts the owner to property income.
- Bedding with a duvet or blanket, window coverings in bedrooms, cooking plates, oven or microwave, refrigerator.
- Dishes, kitchen utensils, table, chairs, lighting, cleaning equipment.
- Storage shelves in each room.
Rental management (finding tenants, inventory, receipts) can be delegated to a professional or managed directly. Delegation represents an additional cost that reduces net yield, but it frees up time and limits the risks of prolonged vacancy.
The LMNP investment remains a structuring system for furnished rental, provided that one does not underestimate the reintegration of depreciation upon exit or the accounting management fees. The choice between micro-BIC and the real regime depends on the financing profile. A precise calculation over the entire holding cycle, from acquisition to resale, provides a more reliable picture than simulations limited to the first years of operation.