Furnished Rentals: Primary or Secondary Residence – Occasional Rental Leads to Partial Deduction

When a property owner rents out a furnished residence but retains the right to use it temporarily during the year, they cannot deduct all related expenses from their taxable income.

According to the tax authorities, income from renting out a primary residence under a non-professional furnished rental (LMNP) is taxed under the category of Industrial and Commercial Profits (BIC). Under the real tax regime, expenses related to the property can be deducted from rental income, but only in proportion to the actual rental period, even if a rental agreement covers the entire year.

Note that this ruling does not apply to properties listed on a company’s balance sheet.

Remark:
Although this decision concerns primary residences held in private ownership, it is likely applicable to secondary residences under similar conditions.

Source: CAA Marseille, July 11, 2024, No. 22MA02210