Taxation of furnished rentals: LMNP and LMP

Furnished rentals offer a particularly attractive tax framework, provided you choose the right status: LMNP (Non-Professional Furnished Rental) or LMP (Professional Furnished Rental). These two regimes offer specific advantages in terms of taxation, depreciation, and asset management. Here’s what you need to know.

What is the LMNP status?

The Non-Professional Furnished Rental status is for individuals who receive rental income from furnished properties, without making it their main activity. To benefit from LMNP, two conditions must be met:

• Rental income must not exceed 23,000 € per year
• Or represent less than 50% of the household’s taxable income

This status is the most common for individual investors.

Tax regimes in LMNP

In LMNP, two tax regimes are possible:

• Micro-BIC: for income less than 77,700 € per year. It offers a flat-rate deduction of 50% on the rent received.
• Real regime: it allows deducting actual expenses and depreciating the property, furniture, and notary fees. It’s the most advantageous regime in most cases.

Depreciation allows neutralizing part of the rent received, or even paying no tax for several years.

The LMP status: Professional Furnished Rental

The Professional Furnished Rental status automatically applies if:

• Furnished rental income exceeds 23,000 € per year
• And represents more than 50% of the household’s taxable income

LMP allows you to benefit from:

• Property depreciation (as in real LMNP)
• Offsetting the deficit against overall income
• Capital gains tax exemption (under conditions after 5 years of activity)

However, the LMP status also implies mandatory affiliation with Urssaf (social contributions).

LMNP or LMP: which to choose?

The choice between LMNP and LMP depends on your profile and objectives:

• Are you starting in furnished rentals with one or two properties? Real LMNP is often the most relevant.
• Are you developing a significant activity, with high rental income? LMP can offer long-term tax optimizations.

Domacap assists you in choosing the right regime, with a clear and strategic vision of your taxation.

Domacap: tailored tax support

We help you:

• Choose between micro-BIC and real regime
• Set up appropriate accounting monitoring (with specialized accountant)
• Anticipate the taxation of resale or transmission
• Secure your legal and tax status

Thanks to our expertise, you maximize your rental income while controlling your taxation.

Conclusion

The taxation of furnished rentals is a powerful lever to optimize your assets, provided you choose the right status and tax regime. LMNP or LMP, Domacap guides you towards the most advantageous solution, with rigor, clarity, and strategy.