LMNP: definition & conditions
Definition
LMNP refers to renting out a furnished home by a landlord who does not carry out this activity on a professional basis. For tax purposes, the income falls under industrial and commercial profits (BIC), not property income.
The rental must be furnished, meaning the tenant can live there normally with minimum equipment (bedding, hobs, refrigerator, dishes, etc.).
Minimum "furnished" equipment
- Complete bedding (bed, mattress, bed base)
- Kitchen equipment (hobs, refrigerator, dishes)
- Storage furniture (wardrobes, shelves)
- Lighting and blinds/curtains
Two "practical" criteria to check
- Type of lease: classic furnished rental, student furnished rental, seasonal rental, serviced residence…
- Level of services: certain (hotel-like) services can switch you over to VAT and specific rules.
Caution: taxation can vary considerably depending on whether you rent "simple furnished" or "hotel-like". The VAT framework is not automatic under LMNP.
LMNP vs LMP: how to decide?
LMNP
Non-professional
The most common regime. Deficits are not offset in the same way as under LMP.
LMP
Professional
May open up different rules (deficit offsetting, capital gains…).
Key
Thresholds & situation
The qualification depends on your income and the place of the activity within your overall earnings.
LMP qualification criteria (2026)
You are considered LMP if you meet both conditions simultaneously:
- Annual furnished rental income > €23,000
- This income is greater than the total of your other earned income (salaries, BIC, etc.)
If at least one of these conditions is not met, you are under LMNP.
In practice, the majority of individual landlords remain under LMNP. If you are approaching high income thresholds, it is wise to have your situation validated by a professional, as the consequences can be significant (deficits, capital gains, contributions…).
Tax regimes under LMNP: Micro-BIC & actual-expense
A. Micro-BIC
Simplified regime: you declare your income, and the administration applies a flat-rate allowance.
- Easy to manage (little accounting).
- Attractive if your actual expenses are low.
- No accounting depreciation of the property.
B. Actual-expense regime (most often the simplified version)
You deduct your actual expenses and can (often) depreciate the property and the furniture.
- More technical (accounting, tax return package).
- Can substantially reduce taxable income thanks to depreciation.
- Often chosen as soon as expenses (interest, works, fees) are significant.
Useful intuition: if your expenses + "potential" depreciation exceed the micro allowance, the actual-expense regime often becomes more advantageous (to be checked with a simulation).
Micro-BIC vs actual-expense: comparison
| Criterion | Micro-BIC | Actual-expense regime |
|---|---|---|
| Management | Very simple | Accounting + tax return package |
| Deductible expenses | Flat rate via the allowance | Actual expenses (interest, works, fees…) |
| Depreciation | No | Yes (property + furniture, per the rules) |
| Tax optimization | Limited | Often substantial (with significant depreciation) |
| For whom? | Low expenses, simplicity | Significant income + expenses, long-term strategy |
Calculation example (year 1)
For a property worth €200,000 (building: €150,000, land: €50,000), annual rents of €12,000:
Micro-BIC
Income: €12,000
50% allowance: -€6,000
Taxable income: €6,000
Actual-expense regime
Income: €12,000
Expenses (interest, fees): -€8,000
Depreciation (3%): -€4,500
Taxable income: -€500
Indicative example. Amounts vary according to your situation (loan rate, actual expenses, depreciation method).
Good reflex: run a simulation for year 1 and year 3. The first years (high interest, letting fees) often favor the actual-expense regime.
Depreciation: rationale & good practices (actual-expense regime)
What is depreciation for?
Depreciation is an accounting expense that "spreads" the cost of an asset (building, furniture) over its useful life. It can reduce taxable income without any annual cash outflow.
Under LMNP with the actual-expense regime, the practice is to depreciate the building (not the land) and the furniture, over customary periods.
"Customary" periods (indicative)
| Item | Order of magnitude |
|---|---|
| Building (excluding land) | ~ 20 to 40 years |
| Components (roof, installations…) | ~ 10 to 25 years |
| Furniture | ~ 5 to 10 years |
| Appliances | ~ 5 to 7 years |
These periods are indicative: they depend on the accounting method and the components retained.
Key point: the land is generally not depreciated. The "land / building" breakdown is therefore an important step in the file.
VAT, CFE, tourist tax: what may apply
VAT
"Classic" LMNP is generally not subject to VAT. However, certain hotel-like services can make the activity taxable (a separate case).
CFE
The business property tax (CFE) may be due on furnished rentals. Exemptions/filings vary by municipality and situation.
Tourist tax
For tourist/seasonal furnished rentals, a tourist tax may apply, often collected via the platform.
To secure: if you offer services such as breakfast, regular "hotel-style" cleaning, linen supply and reception, you may fall outside the standard LMNP framework (VAT rules + obligations). Have your case validated.
Obligations: filings & accounting
Starting the activity
- Choice of regime (micro or actual) and possible options.
- Obtaining a SIRET number (according to the formalities in force).
- Opening a dedicated bank account (recommended).
Every year
- Declaration of LMNP income in the BIC category.
- Under the actual-expense regime: accounting, depreciation, tax return package (and often membership of an approved management body / chartered accountant).
- Possible CFE (according to the notice issued by the administration).
The actual-expense regime requires rigor (supporting documents, land/building breakdown, component tracking). Many landlords use a chartered accountant, especially in the first years.
Common mistakes & points to watch
Confusing furnished & unfurnished
Furnished rentals fall under BIC, not property income.
Underestimating the actual-expense regime
The actual-expense regime can be advantageous, but requires clean accounting and consistent depreciation periods.
Forgetting the CFE
Even on a small scale, the CFE may apply depending on the municipality and situation.
Tip: before choosing micro vs actual, run a 3-year simulation. If you finance with a loan, interest and initial fees weigh heavily at the start.
LMNP operational checklist
Before renting out
- Check "furnished" compliance (equipment list)
- Choose micro-BIC vs actual (simulation)
- Prepare the lease, inventory, move-in report
Administrative start
- Business start formalities (SIRET)
- Opt for the actual-expense regime if necessary
- Set up expense & supporting document tracking
Every year
- BIC filings
- Under the actual regime: depreciation & tax return package
- CFE / tourist tax follow-up if applicable
LMNP FAQ
LMNP: do you necessarily need a chartered accountant?
No, but under the actual-expense regime it often becomes useful: land/building breakdown, depreciation, tax return package… Professional support reduces the risk of errors and can optimize the result.
Can I do short-term rentals under LMNP?
Yes, but watch out for local rules (town hall declaration, change of use) and the tourist tax. Depending on the services offered, the activity may also fall under a hotel-like regime (VAT).
Micro-BIC or actual-expense: how to choose quickly?
If you have a loan, initial fees, and a "substantial" depreciable property, the actual-expense regime is often relevant. Otherwise, micro may be enough. The right choice depends on a multi-year simulation.
What is the minimum equipment for a "furnished" home?
A home is considered furnished if it allows normal living: bedding (bed, mattress, bed base), kitchen equipment (hobs, refrigerator, dishes), storage furniture, lighting. The exact list may vary depending on the legislation and administrative practice.
Can I switch from micro-BIC to the actual-expense regime mid-year?
The change of regime is generally made at the start of the calendar year. If you exceed the micro-BIC thresholds during the year, you must opt for the actual-expense regime the following year. Consult a chartered accountant for the exact procedures.
Does depreciation really reduce tax?
Yes, depreciation is a deductible expense that reduces taxable income. Caution: since February 15, 2025, depreciation taken must be added back into the capital gain calculation upon resale. Tax optimization must be viewed over the long term.
What is the tax difference between LMNP and unfurnished rental?
Unfurnished rental falls under property income, while LMNP falls under BIC. With unfurnished rental, you cannot depreciate the property, and deficits are offset differently. The choice between the two depends on your tax strategy and your ability to furnish the home.
Other investment solutions
As a complement or an alternative to LMNP, other schemes can help you invest in real estate.
Bare ownership
Split-ownership real estate investment: definition, tax advantages, reduced purchase price, simplified management, and estate planning optimization.
Serviced furnished rentals
Professional furnished rental: definition, conditions, tax advantages, differences with LMNP, and obligations.
Unfurnished rental
Unfurnished rental: the classic buy-to-let investment. Taxation, advantages, obligations and differences with furnished rental.
LLI (intermediate-rent housing)
Intermediate-rent housing: a buy-to-let scheme with 10% reduced VAT and a tax credit. Conditions and tax advantages.
Girardin
Girardin scheme: investing in the French overseas territories with a tax reduction. Conditions and tax advantages.
Denormandie
Denormandie scheme: a tax reduction for buying and renovating properties in certain areas.
Historic Monument
Investing in a Historic Monument: exceptional tax advantages for heritage restoration.
Disclaimer
The information in this article comes from the official sources referenced in the "Official sources" section at the bottom of the page. Handee cannot be held liable for any errors, omissions or interpretations of the information presented.
If in doubt or for any question specific to your situation, we invite you to consult the official sources mentioned directly (Service-Public.fr, impots.gouv.fr, etc.) or to contact a qualified professional (chartered accountant, tax advisor, notary).
The LMNP/LMP, micro/actual and VAT rules and obligations may depend on the type of rental, the level of services, your situation and the legislation in force. Eligibility conditions, scales and rules may change. Only the official sources are authoritative.