LMNP: the taxation of furnished rentals explained simply

By default, if your annual rental income stays below the legal threshold, you fall under the micro-BIC. The administration applies a flat 50% allowance on your rents: you're taxed on only half your income, with no bookkeeping required.

The ideal regime for starting out or for a small, occasionally rented studio. But beware: the allowance is flat. If your real expenses exceed 50% of your income — which happens fast with furnishings, works and loan interest — you pay tax on income you didn't actually earn.

Under the réel regime, you deduct all real expenses: loan interest, property tax, insurance, concierge fees, cleaning, linen, minor repairs. Above all, you can depreciate the property and the furniture: each year, a fraction of their value mechanically reduces your taxable result.

In practice, most short-term rental owners under the réel regime pay no tax on their rents for many years. The trade-off: bookkeeping — which is why being supported by an LMNP-specialised accountant pays off.

• ✦Deduction of all real expenses, concierge fees included
• ✦Depreciation of the property (excluding land) and furniture
• ✦Loss carry-forward to following years
• ✦Tax often nil or very low in the early years

From the start of the activity, you must register (via the INPI one-stop portal) to obtain a SIREN number. Depending on your situation, you will also owe the CFE (business property tax), whose amount varies across Bas-Rhin municipalities.

Finally, if your income exceeds certain thresholds or furnished rental becomes your main activity, you switch to LMP status (professional furnished landlord), with different rules — especially on social contributions.