Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or financial advice. French tax rules change frequently and individual circumstances vary. Always consult a qualified advisor before acting on any information presented here.
What Is LMNP?
LMNP — Loueur en Meublé Non Professionnel — is a French tax status for individuals who rent out furnished property without doing so as their primary professional activity. Think of it as France’s way of saying: “You can rent out a flat with furniture in it, and we’ll tax the income — but we’ll give you some rather generous tools to reduce what you owe.”
It’s one of the most tax-efficient ways to earn rental income in France. And unlike the standard revenus fonciers regime that applies to unfurnished lettings (where deductions are limited and the system is frankly unforgiving), LMNP allows you to depreciate the property itself — the building, the furniture, the renovation works — against your rental income. That’s a significant advantage, and it’s the main reason investors structure their French lettings as furnished rather than empty.
The status is available to anyone — French residents, British expats living in France, and non-residents renting out property from across the Channel. You don’t need to set up a company. You don’t need a carte de séjour. You just need a furnished property, a tenant, and a French tax return.
Why LMNP Matters for British Investors
If you own — or are considering buying — a property in France that you intend to rent out, the question isn’t really whether to use LMNP. It’s whether you understand how much it can save you.
Here’s the core appeal: under the régime réel (more on this below), LMNP lets you deduct not just your actual expenses — management fees, insurance, repairs, interest on your French mortgage, accounting costs — but also a notional depreciation charge on the property and its contents. This depreciation is not a cash outflow. It’s an accounting deduction that reduces your taxable rental income, often to zero.
For British investors specifically, this matters for three reasons. First, you’re almost certainly paying French tax on your French rental income regardless of where you live — France taxes rental income at source. Second, the UK-France double taxation treaty means you’ll get credit for French tax paid, but you still want to minimise the French liability. Third, if you’re renting furnished — whether long-term to a local tenant or short-term via Airbnb — you’re already in LMNP territory, and you should be optimising accordingly.
If you’re renting unfurnished, you’re in the revenus fonciers regime, which is less flexible. If you’ve set up an SCI to hold the property, the interaction with LMNP gets more complex — we’ll cover that below.
Who Qualifies for LMNP Status?
You qualify as LMNP if you meet both of these conditions:
1. Your gross furnished rental receipts are below €23,000 per year.
This is the headline threshold. It’s measured on total recettes (receipts, including charges passed on to the tenant), not net profit. If you earn more than €23,000, you may still qualify — read on.
2. Your furnished rental income does not exceed your other professional income.
This is the second limb of the test. Even if you breach the €23,000 ceiling, you remain LMNP as long as your other professional income (salaries, business profits, etc.) is higher than your rental receipts.
Both conditions must be breached simultaneously for you to tip into LMP (Loueur Meublé Professionnel) status. In practice, most British investors earning a salary or pension comfortably stay within LMNP.
The 2026 Change for Non-Residents
Here’s something important if you don’t live in France. Before the 2026 Finance Law (Loi de Finances), the “professional income” comparison for non-residents only looked at income taxable in France. That meant a non-resident earning €25,000 in French rental income but €100,000 in UK salary could still be reclassified as LMP — because the UK salary wasn’t visible to French tax.
Since 2026, the law now considers worldwide income. If your global professional income exceeds your French rental receipts — which it almost certainly does if you’re working in the UK — you stay LMNP. This is a welcome clarification that removes a trap that caught out many British landlords.
You will, however, need to be able to prove your worldwide income if challenged. Keep your UK tax return or P60 handy.
The Furniture Requirement: What Counts as “Meublé”
You can’t just throw a mattress on the floor and call it furnished. French law (Decree No. 2015-981 of 31 July 2015) sets out a mandatory minimum list of items your property must contain to qualify as a location meublée.
The essentials: bedding with duvet or blankets, window coverings (blackout curtains or shutters) in bedrooms, sufficient wardrobe or storage space, adequate lighting in each room, and cleaning equipment appropriate to the property.
In the kitchen: cooking hobs (plaques de cuisson), an oven or microwave, a fridge (with a freezer compartment or separate freezer), enough crockery and utensils for the number of occupants, and a table with seating.
In general terms: shelving, a table and chairs, and anything else necessary for the tenant to live normally from day one without needing to buy their own basics.
The list is prescriptive. If an inspector or the tax authorities find your “furnished” flat lacks, say, proper curtains or a microwave, they can reclassify your income as unfurnished — pushing you into the less favourable revenus fonciers regime. Document your furnishings with photos and an inventory (état des lieux) signed by both parties at move-in.
Two Tax Regimes: Micro-BIC vs. Régime Réel
LMNP income is classified as Bénéfices Industriels et Commerciaux (BIC) — commercial profits — not rental income in the traditional sense. You have two options for how it’s taxed.
Micro-BIC: The Simple Route
If your annual gross rental receipts are below €77,700 (for standard furnished or classified seasonal rentals), you can opt for the micro-BIC regime.
Under micro-BIC, the tax office applies a flat 50% abatement to your gross receipts. You’re taxed on the remaining 50%. No actual expense deductions, no depreciation, no accounting required. You simply declare your gross income and the administration does the rest.
For unclassified short-term tourist rentals (typical Airbnb lets without a classement), the threshold is much lower: €15,000, with only a 30% abatement. This was tightened by the so-called loi anti-Airbnb to discourage unregulated short-term lets.
| Type of letting | Micro-BIC ceiling | Abatement |
|---|---|---|
| Standard furnished (long-term) | €77,700 | 50% |
| Classified tourist rental (meublé de tourisme classé) | €77,700 | 50% |
| Unclassified tourist rental (e.g., standard Airbnb) | €15,000 | 30% |
| Chambres d’hôtes and rural gîtes (gîtes ruraux) | €77,700 | 50%* |
A note on chambres d’hôtes and rural gîtes: Before the Loi Le Meur reforms, these categories benefited from a 71% abatement with a €188,700 ceiling. That was reduced to 50% / €77,700 for 2025 income onwards. However, an amendment to the 2026 Finance Law (voted by the Assemblée Nationale) seeks to restore the 71% / €188,700 regime specifically for chambres d’hôtes and qualifying rural gîtes — distinguishing them from urban Airbnb-type lets. At the time of writing, the practical application of this amendment is still being clarified. If you operate a chambre d’hôtes or rural gîte, check with your accountant whether the restored rate applies to your situation.
Micro-BIC is simple, but it’s rarely the best option. If your actual costs (mortgage interest, charges, insurance, repairs) plus depreciation exceed 50% of your income — which they almost always do — you’re better off under the régime réel.
Régime Réel: Where the Real Savings Live
The régime réel lets you deduct your actual expenses and — crucially — claim depreciation on the property, furniture, and works.
Your deductible expenses include: mortgage interest, property management fees, insurance premiums (assurance PNO), maintenance and repairs, taxe foncière, accounting fees (yes, the cost of the accountant who does all this is itself deductible), travel costs related to the property, and condominium charges (charges de copropriété) that aren’t recoverable from the tenant.
On top of that, you claim depreciation. And that’s where things get interesting.
You must opt for régime réel before the filing deadline for the relevant tax year. If your receipts are below the micro-BIC threshold, the option must be exercised actively — it doesn’t apply by default. Once elected, it binds you for a minimum of two years.
For most British investors with a mortgage and meaningful expenses, the régime réel is the right choice. Full stop. If you’re currently on micro-BIC and haven’t run the comparison, you may be overpaying.
The Power of Depreciation (Amortissement)
This is the headline feature of LMNP under the régime réel, and it’s what sets furnished letting apart from unfurnished.
You’re allowed to depreciate the building (not the land — the land is never depreciable), the furniture, and any improvement works over their estimated useful life. The method used is straight-line depreciation, applied on a component-by-component basis (amortissement par composants).
In practice, a typical residential property might be broken down like this:
| Component | Share of value | Useful life | Annual depreciation |
|---|---|---|---|
| Structure (gros œuvre) | ~50% | 50 years | 1% per year |
| Roof | ~10% | 25 years | 0.4% per year |
| Technical installations (plumbing, electrics) | ~15% | 15 years | 1% per year |
| Interior fittings (kitchen, bathroom) | ~15% | 10 years | 1.5% per year |
| Furniture & equipment | ~10% | 5–7 years | ~1.5–2% per year |
The land is typically valued at 10–20% of the purchase price (higher in Paris, lower in rural areas) and excluded from the depreciable base.
The combined effect can easily produce a depreciation charge of 2.5–4% of the property value per year. On a €300,000 apartment (with land at 15%), that’s roughly €6,375 to €10,200 per year in non-cash deductions — before you even count your actual expenses.
The result: many LMNP landlords report zero taxable rental income for the first 10–20 years. You collect the rent, you pay your costs, and the depreciation absorbs whatever profit remains. The income tax on your French rental? Zero.
There’s a catch, though. Depreciation can reduce your taxable income to zero, but it cannot create a tax loss. If your depreciation exceeds your income (after expenses), the excess is carried forward indefinitely and used in future years when income exceeds expenses. It doesn’t go to waste — it just queues up.
The 2025 Depreciation Clawback: What Changed
Here’s the important development that every LMNP investor needs to understand.
Until February 2025, LMNP was arguably too good. You could depreciate the building during the rental period (reducing your income tax to zero), and then when you sold, your capital gain was calculated on the original acquisition price — as if the depreciation had never happened. You got the tax benefit twice: once through depreciation, once through a lower capital gain.
Article 84 of Law No. 2025-127 (15 February 2025) changed this. Now, when you sell an LMNP property, the depreciation you deducted during the holding period is reintegrated into your taxable capital gain (réintégration des amortissements).
In plain terms: your capital gain on sale is calculated as the sale price minus the acquisition price reduced by cumulative depreciation claimed. The gain is larger, the tax is higher.
Does This Kill the LMNP Advantage?
No — for three reasons.
First, holding period abatements (abattements pour durée de détention) still apply. Under the private capital gains regime, you get full income tax exemption after 22 years of ownership and full social charges exemption after 30 years. If you’re holding long-term — and most property investors are — the clawback is significantly softened or eliminated entirely by taper relief. For more on how taper relief works, see our Capital Gains Tax on French Property guide.
Second, the years of zero income tax during the rental period are real cash savings. Even if you pay a bit more on the exit, the time value of money means deferring tax for 15–20 years is still a net win.
Third, certain categories are exempt from the clawback: managed service residences (résidences de services) including student housing, senior living, and EHPAD nursing homes. If your investment is in one of these, the old rules still apply.
What About Properties Bought Before 2025?
The clawback applies to depreciation deducted from 2025 onwards. Depreciation claimed in earlier years is not retroactively reintegrated. However, the rules on this are still being interpreted, and detailed administrative guidance (BOFiP) has been issued but may evolve. Talk to your accountant.
Social Charges: The Rate That Depends on Where You Live
On top of income tax, French rental income is subject to prélèvements sociaux — social charges. And the rate depends on where you’re affiliated for social security.
| Your situation | Social charges rate |
|---|---|
| French tax resident | 18.6% (CSG 10.6% + CRDS 0.5% + solidarity levy 7.5%) |
| EU/EEA/Swiss social security affiliate | 7.5% (solidarity levy only) |
| UK resident (post-Brexit) | 18.6% (full rate) |
That last line is the painful one for British investors. Since Brexit, UK residents are no longer affiliated with an EU social security scheme. You pay the full 18.6% on your net LMNP income — the same rate as a French resident.
Before January 2026, the rate was 17.2%. The 2026 Social Security Financing Law (LFSS 2026) increased CSG by 1.4 percentage points, bringing the total to 18.6%.
If you hold dual nationality and are affiliated with a European social security scheme (say, you work in Ireland or the Netherlands), you can claim the reduced 7.5% rate. This requires presenting your A1 certificate or equivalent proof of affiliation. It’s worth checking — the difference between 7.5% and 18.6% on even modest rental income is substantial.
The Combined Rate
For a UK-resident non-resident landlord, the combined rate on LMNP income under the régime réel is:
- Income tax: 20% minimum rate (on the first €29,579 of net French income, then 30% above that) — but often zero after depreciation and expense deductions
- Social charges: 18.6% — applied to the same taxable base
If depreciation reduces your income to zero, the social charges are also zero. That’s the beauty of the régime réel: it’s not just income tax you’re sheltering.
Declaring Your Income: The Practical Steps
Registration
Before you start letting, you must register your LMNP activity with the Guichet Unique (the one-stop business registration portal at formalites.entreprises.gouv.fr). This replaces the old Greffe du Tribunal de Commerce registration. You’ll receive a SIRET number — your French business identification number. You need this to file your returns.
Annual Filing
Under micro-BIC, you simply report your gross receipts on your French income tax return (Form 2042-C-PRO).
Under régime réel, you file:
- Form 2031 — the BIC profit declaration (your rental P&L)
- Form 2033 (and annexes A through G) — detailed accounts including the balance sheet, depreciation schedule, and expense breakdown
- Form 2042-C-PRO — transferring the result onto your personal income tax return
If you’re a non-resident, you’ll also file Form 2042-NR for the non-resident income tax rate application.
Do You Need an Accountant?
Under micro-BIC: technically no. It’s one number on one form.
Under régime réel: yes, practically speaking. The depreciation schedule, component allocation, and BIC forms are complex enough that most investors use a specialist LMNP accountant. The good news is that the accounting fees (typically €400–800 per year for a single property) are themselves deductible, and you can claim a tax reduction (réduction d’impôt pour frais de comptabilité) of up to €915 if you’re a member of an organisme de gestion agréé (OGA). The accountant essentially pays for itself.
LMNP and Short-Term Rentals: The Airbnb Angle
If you’re letting your French property on Airbnb or Booking.com, you’re operating a furnished rental — and LMNP applies. But there are additional rules and restrictions to be aware of.
The Micro-BIC squeeze on unclassified Airbnbs. As noted above, if your property is not classified as a meublé de tourisme, your micro-BIC ceiling is just €15,000 with a 30% abatement. This was introduced to discourage casual, unregulated short-term letting. If you’re earning more than a few thousand euros per year from Airbnb, the régime réel becomes almost mandatory.
The Loi Le Meur (2024). France passed significant legislation tightening rules on short-term rentals. If your property is in a copropriété (condominium), the co-owners’ general assembly can now vote to ban or restrict short-term tourist lets. For the full story, see our article on [the Loi Le Meur and its impact on Airbnb in French copropriétés.]
Registration and authorisation. Most French communes with significant tourist activity require you to register your short-term rental and obtain a registration number (numéro d’enregistrement). In some cities — Paris, Lyon, Bordeaux, Nice — you also need a prior authorisation (autorisation de changement d’usage), and the rules on maximum rental days (120 per year for primary residences) are enforced with increasing seriousness.
For a practical walkthrough of Airbnb letting in France, see our How to Airbnb in France guide.
None of this changes the LMNP tax treatment, but it adds an operational layer that you need to navigate before the tax question even arises.
LMNP vs. SCI: Which Structure for Furnished Letting?
This is one of the most common questions we get — and the answer is less straightforward than you might hope.
An SCI (Société Civile Immobilière) is a French property holding company. Many British investors use one for succession planning, shared ownership, or liability management. If you’re not familiar with SCIs, start with our [What Is an SCI? guide.]
Here’s the tension: an SCI that carries out commercial activity — including furnished letting — is, in principle, subject to corporate tax (Impôt sur les Sociétés, IS), not the income tax regime that SCIs normally benefit from. Furnished letting is classified as a commercial (BIC) activity under French law, and commercial activity in a société civile triggers mandatory IS treatment.
What this means in practice:
- If your SCI rents furnished, it’s taxed under IS (corporate tax at 15% on the first €42,500, then 25%). You can still depreciate the property and deduct expenses — but the profits are subject to corporate tax, and extracting them as dividends incurs a second layer of tax.
- The transparent income tax treatment that makes SCIs attractive for family property holding disappears once you go furnished.
- Some investors structure things with a separate LMNP activity held personally alongside an SCI that holds the property. This requires careful legal structuring and isn’t always practical.
The bottom line: if you’re planning to let furnished, holding the property personally (or en indivision) is usually more tax-efficient than holding through an SCI. If you already have an SCI and want to start furnished letting, talk to your accountant before making any changes — the IS reclassification can be irreversible.
For more on how SCI taxation works, see our guides on SCI accounting and CCA structures.
A Quick Note on LMP
If your furnished rental receipts exceed €23,000 and exceed your other professional income, you cross from LMNP into LMP (Loueur Meublé Professionnel). This is a different tax status with different implications — notably, capital gains are taxed under the professional regime (which can be more burdensome), and you become liable for social security contributions (cotisations sociales) on your rental profits.
For most British investors earning a UK salary or pension, LMP is unlikely to apply. But if you’re retired with modest pension income and a substantial French rental portfolio, the thresholds can creep up. The 2026 worldwide income rule (discussed above) actually helps here — it makes the comparison fairer for non-residents.
We’ll cover LMP in detail in a future article. For now, just know it exists and check annually that you haven’t inadvertently crossed the line.
Common Mistakes We See
1. Staying on micro-BIC out of inertia. Many investors default to micro-BIC because it’s simpler. But if you have a mortgage, you’re almost certainly leaving money on the table. Run the numbers — or ask your accountant to run them.
2. Not registering for a SIRET number. You need one. Without it, you can’t file a régime réel return, and you may face penalties for operating an undeclared commercial activity.
3. Forgetting the furniture inventory. If the French tax authorities reclassify your income as unfurnished because you can’t prove the property was properly equipped, you lose the BIC classification and all the depreciation benefits with it. Photograph everything. Sign an état des lieux.
4. Ignoring the Airbnb registration requirements. Fines for unregistered short-term rentals are increasing. In Paris, the fine can reach €10,000 per listing. Comply first, optimise tax second.
5. Not claiming the accountant fee deduction. If you’re on régime réel and using a qualified accountant through an OGA, the accounting fees are both deductible and eligible for a direct tax reduction. It’s almost free professional advice. Use it.
6. Mixing SCI and LMNP without understanding the IS consequences. See above. Furnished letting through an SCI means corporate tax. No exceptions, no workarounds (short of elaborate restructuring). Get advice before committing.
Frequently Asked Questions
Can I use LMNP if I don’t live in France?
Yes. LMNP is available to non-residents. You’ll need to register with the Guichet Unique, obtain a SIRET, and file French tax returns annually. Your rental income is taxed in France regardless of your country of residence.
Do I need to register a company?
No. LMNP is a personal tax status, not a corporate structure. You register as an individual entrepreneur (entreprise individuelle) for the sole purpose of declaring BIC income. There’s no company to form, no shareholders, no articles of association.
What’s the minimum rental period for LMNP?
There’s no minimum. LMNP applies whether you’re renting long-term (12-month lease), medium-term (1–10 months, common for student or corporate lets), or short-term (nightly via Airbnb). The tax treatment is the same, though the regulatory requirements for short-term vary by commune.
Can I switch from micro-BIC to régime réel?
Yes. You must notify the tax office before the filing deadline for the year you want the change to take effect. The option is binding for a minimum of two years.
Is LMNP income taxed in both France and the UK?
French rental income is taxed in France first. Under the UK-France double taxation treaty, the UK grants a credit for French tax paid, so you shouldn’t be taxed twice on the same income. However, if the French tax is lower than what the UK would charge, you may owe the difference to HMRC. Consult a cross-border tax advisor.
What happens to my LMNP status if I move to France?
Nothing changes in terms of the LMNP qualification. The €23,000 and professional income thresholds apply equally to residents and non-residents. However, your personal income tax rate may change (you’ll be taxed on a progressive scale rather than the minimum 20% non-resident rate), and your social charges will be 18.6% as a French fiscal resident.
How does LMNP interact with the capital gains tax on selling the property?
When you sell, you’re subject to French capital gains tax under the private individuals’ regime — income tax at 19% plus social charges, with taper relief for holding periods. Since 2025, depreciation claimed during the LMNP period is reintegrated into the capital gain calculation. For full details, see our Capital Gains Tax guide.
This article was last updated in April 2026 and reflects the rules applicable following the 2026 Finance Law (Loi de Finances pour 2026) and the 2026 Social Security Financing Law (LFSS 2026). French tax legislation changes frequently — always verify current rules with a qualified professional.
