What is LMNP status (non-professional furnished rental) and how is it taxed?

What distinguishes LMNP from LMP

The letting of a furnished home comes, for tax purposes, under industrial and commercial profits (bénéfices industriels et commerciaux, BIC), and not the rental-income category (revenus fonciers) that applies to unfurnished letting. The professional or non-professional nature of the activity is defined by Article 155, IV of the CGI, which lays down two cumulative conditions for being a professional lessor (loueur en meublé professionnel, LMP).

The activity is professional where, cumulatively, the annual receipts from furnished letting by the whole tax household exceed a threshold set by law and exceed the household's other activity income subject to income tax. If either of these two conditions is not met, the lessor is non-professional: this is LMNP status. The receipts threshold is set by law and can change; check the amount applicable to the year concerned.

• Furnished letting = income taxed under BIC (and not rental income).
• Professional nature defined by two cumulative conditions in Article 155, IV of the CGI.
• LMNP = at least one of the two LMP conditions not met.
• Receipts threshold set by law, liable to change.

Two taxation regimes: micro-BIC or actual

The LMNP is taxed either under the micro-BIC regime or under the actual regime. The micro-BIC applies automatically where receipts do not exceed a legal ceiling; it gives entitlement to a flat-rate allowance representing costs, with a minimum floor. The rate of this allowance differs according to the nature of the letting: it is higher for conventional furnished lettings and classified tourism accommodation, and lower for unclassified tourism accommodation.

These ceilings and allowance rates have been the subject of recent legislative changes, notably for tourism lettings. Do not treat them as timeless: check the receipts ceiling and the micro-BIC allowance rate applicable to the tax year on impots.gouv.fr or in the BOFiP.

• Micro-BIC: flat-rate allowance, rate varying by type of letting, legal receipts ceiling.
• Actual regime: deduction of actual costs and depreciation.
• Ceilings and allowance rates recently changed: to be checked for the current year.

Depreciation, the strength of the actual regime

Under the actual regime, the LMNP deducts its actual costs (loan interest, property tax, co-ownership charges, insurance) and, above all, depreciates the property and the furniture. Depreciation reflects, in accounting terms, the property's decline in value and reduces, or even cancels, the taxable result, which explains the appeal of this regime.

The CGI nevertheless frames this advantage: the depreciation allowed as a deduction cannot create or worsen a loss. The fraction of depreciation that exceeds the profit is carried forward and remains deductible without time limit against future profits. Depreciation is thus neutralised in loss-making years then reactivated when the activity generates a profit.

Point of attention: since the Finance Act for 2025, the depreciation deducted during the rental period is, for many properties, reintegrated into the calculation of the capital gain on resale, according to the rules in force at the time of the sale. Get support from a chartered accountant to keep LMNP accounts under the actual regime.

• Actual regime: deduction of actual costs + depreciation of the property and furniture.
• Depreciation cannot create or worsen a loss; the excess is carried forward without time limit.
• Reintegration of depreciation into the capital gain on sale: check the rules in force in the year of the sale.
• Specific accounting: support from a chartered accountant recommended.