LMNP in France: A Guide for Investors

If you are buying a furnished property in France, one tax status is worth understanding before you commit: LMNP, the non-professional furnished rental. For years it was one of the most useful setups available to a private investor. The rules changed in 2025, and it still works well once you understand what moved. This guide explains it plainly, so you can weigh it for your own purchase.

Key takeaways

• LMNP is a tax status for letting furnished property without it being your main professional activity.
• Two tax regimes exist: micro-BIC (a flat allowance) and régime réel (deduct real costs, including depreciation).
• Depreciation under the régime réel can reduce or cancel tax on the rent for years.
• Since 15 February 2025, that depreciation is added back when calculating the capital gain at resale, so the tax on exit can be materially higher than before.
• The income-side advantage of the régime réel largely remains; what changed is the resale, where depreciation is now added back. Holding strategy belongs in the brief from day one.

What LMNP is

In France, furnished letting is taxed as a business activity (bénéfices industriels et commerciaux, BIC), not as standard rental income. You hold the non-professional version of the status, LMNP, by default, unless two conditions are both met: annual furnished-rental receipts above €23,000 for the household, and those receipts exceeding the household’s earned income. Meet both and you become a loueur en meublé professionnel (LMP), a different regime.

Source: impots.gouv.fr.

Micro-BIC. A simplified regime with a flat allowance and no itemised deductions. For ordinary long-term furnished letting the ceiling is €77,700 of annual rent received, with a 50% allowance, and it is revalued upward for income from 2026. Short-term and unclassified tourist lets follow different, lower limits.

Source: impots.gouv.fr; Service-Public.fr.

Régime réel. You deduct your actual costs from the rent, including the depreciation (amortissement) of the property and furniture. This is the regime most investors use, because depreciation can reduce or neutralise the tax on rental income for several years.

Source: impots.gouv.fr; Service-Public.fr.

The depreciation advantage, and what changed in 2025

Under the régime réel, depreciation lowers the taxable rental result each year. For a long time it had a second, separate benefit: when you sold, those deductions were ignored in the capital-gains calculation, which followed the standard private-individual rules.

That second benefit ended. A 2025 reform changed the resale side. For sales from 15 February 2025, the purchase price used to work out the gain is now reduced by the depreciation you deducted during the letting period. A higher gain means higher tax.

Source: Légifrance.

A 2026 ruling confirmed the measure also captures depreciation booked before 2025, not only from 2025 onward.

Source: Réponse ministérielle, 24 March 2026.

Two points narrow it: investors taxed under micro-BIC are not affected, because they never deduct depreciation in the first place; and certain serviced residences are excluded by the rules.

Source: Légifrance; impots.gouv.fr.

How the capital gain itself is taxed

Separately from the reform, the private capital gain on a property that is not your main home is taxed at 19% income tax plus 17.2% social levies. Allowances for length of ownership reduce the base over time: full exemption from income tax after 22 years, and from social levies after 30 years. An additional surtax of 2% to 6% applies to taxable gains above €50,000.

Source: Service-Public.fr.

Because tax rules change, confirm the rates and allowances that apply on your actual sale date.

Infographic block: before and after the reform (illustrative)

Format: before/after financial frame, Deep Green on Cream. Numbers below are a simple illustration of the mechanism, not market values.

A property bought for €200,000, sold for €250,000, after €40,000 of depreciation was deducted during the let.

Before the reform: gain = €250,000 minus €200,000 = €50,000 After the reform: purchase price reduced by depreciation: €200,000 minus €40,000 = €160,000; gain = €250,000 minus €160,000 = €90,000

Same sale. The taxable gain rises by the depreciation taken (here, €40,000), before allowances for length of ownership are applied. This shows the mechanism, not the final tax bill.

MoveNest note

The reform does not end the case for LMNP. The income-side advantage is largely intact. What it changes is the shape of the decision. The old approach treated the rental years and the resale as two separate, both-favourable events. They are now linked: the more you depreciate to ease tax on the rent, the more is added back when you sell.

For an international investor, this makes a few questions part of the brief from the start, not the exit: How long do you intend to hold? Is the plan rental income, resale, or transfer to family, where the gain may not arise the same way? Does micro-BIC or réel fit your case? These are not details to settle after signing. They shape which property, at which price, in which arrondissement, makes sense in the first place.

This is general information, not tax advice. The figures here are official and dated, but your situation should be confirmed with a French tax professional or notaire before you act.

This article provides general information on French tax rules as understood in June 2026. It is not tax or legal advice. Rules change; confirm current figures and your personal situation with a qualified professional before acting.

Sources

• Légifrance, Loi n° 2025-127 du 14 février 2025 de finances pour 2025, article 84 (creating CGI art. 150 VB III). Consulted June 2026.
• impots.gouv.fr, Location meublée; régimes d’imposition; LMNP / LMP (CGI art. 155, IV). Consulted June 2026.
• Service-Public.fr, Revenus d’une location meublée; Plus-value immobilière (rates, allowances, exemptions). Consulted June 2026.
• economie.gouv.fr, micro-BIC thresholds for furnished letting and the 2026 triennial revaluation. Consulted June 2026.
• Réponse ministérielle Mette (question n° 10097), Journal officiel de l’Assemblée nationale, 24 March 2026.

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