Rental income: understanding the tax regime and its options
When you make a rental investment, the rents you receive as an owner renting out unfurnished property are, for the tax consultant, income from real estate that must be declared for taxes.
They constitute one of the 8 categories of taxable income. In the case of Non-Professional Furnished Rental (LMNP), rental income is considered as Industrial and Commercial Profits (BIC). This obviously does not exempt them from being declared for taxes, under their own tax regimes, under the BIC category. We refer you to the article we devoted to this topic here.
Dear landlords of unfurnished housing, we are providing you with an overview of the different tax regimes as well as the deductible expenses.
The different tax regimes 🔎
What charges can be deducted under the actual regime? 👍🏻
The general principle is as follows: all expenses related to the maintenance of the rental property are deductible. This does not include pure improvements (expansion, swimming pool, terrace...).
Here is a list of categories that are even more telling:
Maintenance, repair, and energy performance improvement expenses;
Management fees;
Co-ownership charges provisions;
Insurance premiums;
Loan interest;
Taxes and levies;
Eviction compensation and relocation fees.
Finally, for an expense belonging to the aforementioned categories to be truly deductible - to say the least - it must:
Be justified (invoices and proof of payment to be kept in case of a tax audit);
Be borne by the owner;
Have been paid during the tax year
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