General information, not advice. What follows is a bill, not a law, and it will change before December.
On 1 October the government put its 2027 budget on the table, and article 7 is addressed to anyone who owns a furnished flat in France and lets it under the LMNP regime, which is most readers of this site who let at all. I read the article, the explanatory note, and the two committee amendments that touched it on 8 October. Here is what it says, in the order it matters, and what I would do about it.
What the bill says. Today, if you let furnished under the régime réel, you deduct the depreciation of the building (the amortissement) from the rent, year after year, at a rate that usually works out between two and a half and four per cent of the price of the walls. That is why a sensibly bought LMNP flat has paid little or no income tax for a decade. Article 7 of the bill writes a ceiling into article 39 C of the tax code. For a non-professional landlord, the deductible depreciation of the premises is capped at 2.5 per cent a year and €7,000 per tax household. For a meublé de tourisme, a holiday let, the rate drops to 1.5 per cent and the cap to €5,000. The two limits stack, and the lower one applies. Furniture and fittings are outside the cap. Student, senior and care residences are excluded.
Two numbers show who is hit. A €280,000 flat, land excluded, at 2.5 per cent gives exactly €7,000, so one ordinary flat sits right at the ceiling. A €450,000 Paris flat gives €11,250 and loses €4,250 of deduction a year. Two flats share one €7,000 cap, because the cap is per household, not per property. The same €280,000 flat let to holidaymakers gets €4,200.
The second half is the part most of the coverage has skipped. Today, depreciation you cannot use in a given year (the existing rule already stops it from creating a loss) is carried forward without limit. Under article 7, for accounting years closing from 1 January 2027, any depreciation you cannot deduct is lost, not carried, whether the new cap blocked it or the old rule that stops depreciation from creating a loss. The stock you built up before 2027 survives, but it can only be used until 31 December 2036 and only up to half of the taxable profit in any year. If you have been sitting on a pile of unused depreciation from a flat bought in 2019, that pile now has a clock on it.
Nothing here touches the micro-BIC, which is a flat allowance with no depreciation to cap. Nothing touches professional landlords. And the sale-side rule from the 2025 budget, which adds the depreciation you claimed back into the capital gain when you sell, stays exactly as it is. The regime now gives less on the way in and takes more on the way out, which is the point: the note attached to the bill says in so many words that the aim is to bring furnished letting into line with the bare-rental Jeanbrun scheme the 2026 budget created.
What happened in committee on 8 October. The finance committee adopted two amendments that pull in opposite directions. The first, from the Socialist group, says that a holiday let bought on or after 1 January 2027 gets no depreciation at all. The second, from Guillaume Kasbarian’s group, takes out of the cap altogether furnished flats let under an ordinary residential lease (the bail meublé of the 1989 law and the bail mobilité) and flats let to students, trainees and apprentices. If both survived, the cap would land mainly on holiday lets (and on furnished lets outside the 1989 law, such as a code civil lease to someone for whom the flat is a second home), and new holiday lets would get nothing. One warning before you plan around either: on a finance bill the chamber debates the government’s text, not the committee’s, so both amendments have to be tabled and voted again on the floor, then survive the Senate and the joint committee. The chamber takes the first part of the bill in the coming weeks.
What I would do. If you let furnished on a residential lease and you are under the cap, nothing, except watch. Most single flats outside Paris sit at or under €7,000, and the Kasbarian amendment would take you out anyway. If you run a holiday let, I would run the 2027 numbers now at 1.5 per cent and €5,000, and I would think hard before buying a second one before the vote, because a purchase after 1 January 2027 may carry no depreciation at all. If you have a large carried-forward stock, ask your accountant how much of it you can realistically use by 2036 under the half-of-profit rule, because that figure decides whether the réel still beats the micro for you. And if you were planning to buy an expensive flat for the write-off, that argument is gone whatever happens in December. The direction of travel since 2024 has been one way, and we said so in September when the only evidence was a report. The LMNP guide carries the current rules and will be updated when the text is final.
I will update this piece after the floor vote and again after the Senate.
Readers, does the €7,000 cap bite on your flat once the land is taken out, and has your accountant modelled it? Do you hold a holiday let in your own name or through a company? Would a cap push you back to the micro-BIC, or out of furnished letting altogether?
