Non-professional furnished rental
What is furnished rental?
Furnished rental corresponds to providing a residential property equipped with furniture, provided it includes all the furniture elements essential for normal occupation by the tenant.
Furnished Rental allows you to become the owner of a furnished property while receiving tax-free rental income.
You can also recover VAT under certain conditions.
You are considered to be carrying out a non-professional furnished rental (LMNP):
- as long as the income generated from your rental does not exceed the sum of €23,000 per year
- and 50% of your total professional income per year.
Non-Professional Furnished Rental (LMNP) is a popular tax regime because it offers many advantages.
Non-Professional Furnished Rental is often linked to investments involving smaller surface areas.
As a result, the investment is generally affordable and easily financed.
The other advantages are fiscal, as you can depreciate your real estate assets, including the initial acquisition as well as its furniture and fittings. You can also deduct the amount of your actual expenses (costs).
Of course, these tax benefits are linked to choosing the right tax regime.
What is the tax regime for Non-Professional Furnished Rental (LMNP)?
You can consult the website impot.gouv.fr and we have summarized the essentials for you here:
By default, the tax regime automatically applied is the so-called “Micro-BIC” regime (Industrial and Commercial Profits).
If opted for, the regime applied is the “Réel BIC” (Actual Expenses).
But let’s look at these 2 regimes in detail:
- “Micro-BIC” Regime
Your taxation is based on the amount of income received, minus a flat-rate deduction of 50%, ranging between 30% and 71% depending on the nature of the rental (residential, guest rooms, furnished tourist accommodation).
On the other hand, you cannot deduct the actual amount of your expenses.
However, you have the option to waive the micro-regime and opt for the “Réel” (actual) regime.
- “Réel BIC” Regime
The “Réel” regime applies by right to furnished lessors who receive, for two consecutive years, an amount of income exceeding a certain threshold which depends on the nature of the rental (threshold between €15,000 and €188,700).
You can also choose this regime by option in other cases.
This regime allows for the deduction of actually incurred charges and depreciation.
How to choose between the “Micro-BIC” and the “Réel BIC” tax regimes?
When the amount of actual expenses proves to be higher than the flat-rate deduction percentage of the furnished rental income, it is then in your interest to opt for the “Réel BIC” tax regime.
Indeed, provided all other conditions are met, the charges and the depreciation of the property are deductible and can, if applicable, generate a deficit.
In the majority of cases, perhaps 80 to 85% of cases, the “Réel BIC” tax regime is the most advantageous.
To further convince you of the interest of the “Réel BIC” tax regime compared to the “Micro-BIC” regime, we provide you with a free simulator to calculate the amount of your tax for each of the two regimes based on your personal situation.
We have created this simulator in Excel and you can download and use it without restriction. We will not keep any personal data and we will not solicit you commercially.
Nevertheless, you can contact our specialized department directly: lmnp@laviale.com.
We can present you with all of our accounting and tax offers for your Non-Professional Furnished Rental (LMNP) activity. Discover our offer of specific missions for furnished rental activities
Simulateur gratuit Excel
