Rental income: should you choose the micro-foncier or the actual regime?
Income from unfurnished letting comes under rental income (revenus fonciers), taxed under the micro-foncier or the actual regime. The micro-foncier, applicable below a receipts threshold set in Article 32 of the CGI, applies a flat-rate allowance of 30%. The actual regime allows actual costs to be deducted.
The micro-foncier: simplicity and a flat-rate allowance
Unfurnished (non-furnished) letting generates rental income (revenus fonciers). The micro-foncier regime, provided for in Article 32 of the CGI, applies automatically where the household's annual gross rental income does not exceed a legal threshold and the taxpayer does not hold properties subject to certain special regimes. Under this regime, the authority automatically applies a flat-rate allowance of 30% representing costs: you may then deduct no actual costs on top.
This threshold and the 30% allowance rate are set by law. The 30% rate has long been stable, but any numerical parameter can be amended by a Finance Act: check the threshold and the rate in force for the tax year.
- Micro-foncier = unfurnished letting, gross rental income below the legal threshold (Article 32 of the CGI).
- Flat-rate allowance of 30% applied automatically, no actual costs deductible on top.
- Threshold and rate set by law: to be checked for the year concerned.
The actual regime: deduction of actual costs
The actual regime applies automatically above the micro-foncier threshold, and by option below it. It allows deduction from gross rental income of the costs actually borne and exhaustively listed by the CGI (Articles 28 and 31 of the CGI): loan interest, maintenance, repair and improvement work, insurance premiums, property tax, management fees, co-ownership provisions.
The actual regime is generally more favourable as soon as the deductible costs exceed the micro-foncier's 30% flat-rate allowance, which is frequent in the case of a loan or major work. It also makes it possible to record a property deficit deductible from overall income within certain limits.
- Actual regime automatically above the threshold, by option below it.
- Deductible costs listed in Articles 28 and 31 of the CGI (interest, work, property tax, insurance, management).
- More attractive than the micro-foncier when costs exceed 30% of rents.
- Allows the creation of a property deficit.
The option for the actual regime: a three-year commitment
A taxpayer under the micro-foncier may opt for the actual regime. This option is exercised for a three-year period, during which it is irrevocable, then renews tacitly year by year as long as it is not cancelled. This binding nature means you must project your costs over several years before opting.
The choice is steered from an estimate: compare the micro-foncier's 30% allowance with the total of your deductible actual costs. If major work is planned, the actual regime generally becomes the winner. A precise numerical break-even point depends on your situation: run a simulation before committing.
- Option for the actual regime: three-year commitment, then tacit renewal.
- Choice to be projected over several years (work, loan).
- Comparative simulation recommended before opting.
Frequently asked questions
What threshold to stay under the micro-foncier?
The micro-foncier applies as long as the household's annual gross rental income does not exceed the ceiling set in Article 32 of the CGI, currently 15,000 euros, provided you do not hold properties excluded from the regime. This amount may change: check the threshold applicable to the tax year.
Can I deduct my work under the micro-foncier?
No. The micro-foncier applies a flat-rate allowance of 30% meant to cover all costs, including work. You may deduct no actual expense on top. To deduct major work, you must opt for the actual regime.
Is the option for the actual regime final?
It binds you for three years, a period during which you cannot return to the micro-foncier. At the end of those three years, the option renews tacitly each year and can then be cancelled to return to the micro-foncier if you stay under the threshold.
Read next
- Légifrance, article 32 du Code général des impôts (régime micro-foncier)
- Légifrance, articles 28 et 31 du CGI (détermination du revenu foncier et charges déductibles)
- BOFiP, BOI-RFPI-DECLA-10 (régime micro-foncier)
- Service-Public.fr, revenus fonciers : micro-foncier ou régime réel
- impots.gouv.fr, revenus fonciers
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