The Non-Professional Furnished Rental status (LMNP) offers highly attractive tax benefits for property owners. This regime allows you to deduct far more expenses than the traditional rental income (revenus fonciers) system applicable to unfurnished rentals, mainly thanks to property depreciation. Before you start, it’s essential to understand the rules that govern the LMNP status, its tax implications, and how it differs from the Professional Furnished Rental status (LMP).

Below is everything you need to know about how LMNP taxation works, the available regimes, advantages, limits, and practical obligations.

What Is LMNP and How Does It Work?

The LMNP regime allows individuals to invest in furnished rental properties, whether new or existing, while benefiting from tax incentives. Under LMNP, rental income is taxed in the category of Industrial and Commercial Profits (BIC).

You can choose between:

• The Micro-BIC regime → A fixed tax allowance applied to rental income.

• The Real Regime (Régime Réel) → Deduction of actual expenses + property depreciation, which significantly reduces taxable income.

For many landlords, LMNP becomes a profitable long-term investment thanks to recurring rental income and optimized taxation.

LMNP Taxation: The Two Possible Regimes

1. Micro-BIC Regime

Under the Micro-BIC system, a flat tax allowance is applied to your rental income. You are taxed only on the remaining portion.

2025 Abatements & Thresholds

Important notes:

• No actual expenses can be deducted.

• No depreciation is allowed.

• You simply declare your gross rental income on Form 2042-C PRO (boxes 5ND to 5ST).

Can You Switch From Real to Micro-BIC?

Yes, you can return to Micro-BIC by notifying your local Service des Impôts des Entreprises (SIE), provided your revenue does not exceed the applicable thresholds.

2. The Real Regime (Régime Réel)

The Real Regime applies:

• Automatically when thresholds are exceeded.

• Voluntarily, even below thresholds (option for Réel Simplifié).

Limits

• Réel Simplifié: revenue ≤ 254,000 € (840,000 € for classified tourist rentals or guest rooms)

• Réel Normal: mandatory above these limits

How Taxable Income Is Calculated

Taxable profit =
Rental Income – Actual Expenses – Depreciation

The Real regime often results in very low or zero taxable income.

Mandatory Tax Forms

1. Form 2031-SD (LMNP profit calculation – complex, often requires a professional)

2. Report results in Form 2042-C PRO:

   • Profits → boxes 5NA to 5PA

   • Deficits → boxes 5GA to 5GJ (only offsettable against future LMNP profits for 10 years)

Should You Choose Micro-BIC or Real?

Compare:

• True annual costs + depreciation (Réel)
  vs.

• Fixed allowance (Micro-BIC)

Choose the Real regime when your real costs exceed the Micro-BIC allowance.

How LMNP Income Is Taxed

Regardless of regime:

• Net profit is taxed using the progressive income tax scale (0% to 45%).

• Social contributions (17.2%) apply to LMNP profits.

Conditions to Qualify for LMNP

To remain under LMNP status:

• Furnished rental income must not exceed €23,000 OR

• Must remain lower than your other earned income (salaries, self-employment income, etc.).

Minimum Equipment Required (official list)

To qualify as “furnished,” the property must include:

• Bed and bedding

• Window coverings

• Cooking plates

• Oven or microwave

• Refrigerator (with freezer compartment)

• Necessary dishes and utensils

• Table and chairs

• Storage shelves

• Lighting

• Cleaning equipment

LMNP Registration

Since January 2023, LMNP registration is completed exclusively through the INPI online business portal.

How to Avoid Paying Income Tax as an LMNP

Two situations allow for zero tax:

1. You fall within the 0% income tax bracket

Adding LMNP income does not exceed the threshold.

2. Your LMNP activity produces no taxable profit (Real regime only)

This occurs when:
Expenses + Depreciation > Rental Income

Under Micro-BIC, a deficit is not possible, so tax cannot be eliminated.

When LMNP May Not Be Suitable

LMNP may not be ideal when:

• Another structure (such as a real estate company or SCI) better suits your goals.

• You prefer longer rental periods (furnished leases are shorter).

• You want to avoid business registration or bookkeeping obligations.

• You plan to sell quickly (depreciation increases taxable capital gain since 2025).

Risks & Drawbacks of LMNP

• Shorter leases → frequent tenant turnover

• Mandatory business registration

• Bookkeeping costs in the Real regime

• Possible future legal reforms affecting LMNP

• New 2025 rule: Depreciation must now reduce the purchase value, increasing capital gains on sale

Taxation of Capital Gains Under LMNP

LMNP follows the capital gains regime for private individuals, which is highly favorable.

Key Principles

• Only taxable for transfers for consideration (e.g., sales)

• Capital gains taxed at:

  • 19% income tax

  • 17.2% social contributions

• Depreciation increases taxable capital gain (especially after 2025 reform)

Capital Gains Exemptions

• Total income tax exemption after 22 years

• Total social contributions exemption after 30 years

Deductible Expenses in LMNP (Real Regime)

Examples:

• Maintenance and repair costs

• Loan costs (interest, fees)

• Furniture and equipment

• Acquisition fees

• Accounting, insurance, subscriptions

• Co-ownership charges

• Property taxes

• Management fees

Social Security Contributions in LMNP

You must pay self-employed (TNS) contributions if:

• Your rental income exceeds 23,000 €, AND

• You operate short-term or seasonal rentals

Otherwise, LMNP income is subject only to 17.2% social contributions.

FAQ – LMNP Taxation & Rules

What is the difference between LMNP and LMP?

• LMNP applies when furnished rental income:

  • Is below 23,000 € OR

  • Does not exceed other earned income

• LMP applies when both thresholds are exceeded.

• Capital gains:

  • LMNP → private individual regime (more favorable)

  • LMP → professional capital gains

• Deficits:

  • LMP → can offset total household income

  • LMNP → can only offset LMNP profits

Is LMNP subject to CFE (business property tax)?

Yes.
CFE applies to all LMNP rentals—Micro-BIC or Real.
Exemption: if annual rental income < 5,000 €.

Under the Real regime, CFE is deductible.

FAQ About Creating an LMNP

What’s the difference between Pinel and LMNP?

• LMNP → furnished rentals by non-professionals

• Pinel → tax reduction for unfurnished long-term rentals

Can LMNP be combined with other tax incentives?

No.
LMNP cannot be combined with Pinel or similar schemes.

How do I obtain a SIRET number for LMNP?

By declaring your LMNP activity on the INPI business portal.
Each furnished property at a different address must have its own SIRET.

Can I register my LMNP through Infogreffe?

No. Since 2023, only the INPI portal is used for LMNP registrations.

Can I live in a property declared under LMNP?

No, unless it is rented to someone (even a relative) under a proper lease with market-value rent.
If rented to a relative → they lose eligibility for CAF housing aid.