If you rent a furnished property under the status of Non-Professional Furnished Rental (LMNP), the declaration LMNP is an essential step to comply with tax requirements.
Renting in LMNP involves specific procedures, including registration with the Commercial Court Registry, choosing the tax regime, and filling out the P0i form. We present all the steps for a simple LMNP declaration!
Why is the LMNP declaration mandatory?
When you rent a furnished property under LMNP, your rental income is taxed in the category of Industrial and Commercial Profits (BIC). Although this does not make you a professional in the strict sense, the State considers you to be engaging in a commercial activity. The LMNP declaration is therefore necessary to comply with tax regulations and to benefit from the advantages of the status.
Attention, you must register your non-professional furnished rental activity no later than 2 weeks after your purchase.
The steps of the LMNP declaration
1. Registration with the Commercial Court Registry
The first step to declare your furnished rental property (LMNP) is to register with the competent Commercial Court Registry for the property you are renting. This process allows you to:
Declare your furnished rental activity,
Obtain a SIRET number,
Choose your tax regime, micro-BIC or real regime.
If you own multiple properties in LMNP, the registration location is determined by the property generating the highest rental income.
2. Fill out the P0i Form
The P0i LMNP form is essential to formalize your registration and declare your furnished rental activity. You can download it from the website of the General Directorate of Enterprises or request it directly from the Commercial Court Registry. Here is the information to provide:
Start date of activity: This can be the rental start date or, if work was done beforehand, the purchase date may be preferred, allowing for certain expenses to be deducted under the real regime.
Chosen tax regime: Indicate whether you choose the micro-BIC or the real regime.
VAT option: Furnished rentals without services are not subject to VAT, so the “basic exemption” option is generally chosen.
3. Choice of Tax Regime: Micro-BIC or Real Regime?
In your LMNP declaration, the choice between micro-BIC and real regime is crucial for optimizing your taxation:
Micro-BIC: This regime offers a standard deduction of 50% on your rental income (up to €70,000 in annual rental income).
Real regime: Often preferred for LMNP, this regime allows you to deduct expenses (loan interest, works, management fees) and depreciation of the property and furniture from your rental income, which reduces the taxable profit.
It is essential to choose your tax regime well, on the one hand, because it can drastically change your tax amount, but also because some decisions will impact your asset throughout its duration. Our best advice: seek assistance. Even if it costs you a little more, at least in the first year following the acquisition of your property.
LMNP declaration in joint ownership: The FCMB form
If you own the property in undivided ownership (for example, in a common-law union, under the separation of property regime), the procedure differs slightly. You will need to fill out the FCMB form (Cerfa 11924*01) instead of the P0i form to declare the activity in the name of the undivided ownership.
Catch-up of LMNP declaration: Regularize your situation
Although the LMNP declaration is mandatory, some owners omit filling out the P0i form. It is possible to regularize one's situation afterwards, but it is better to get in order quickly to avoid penalties and the Business Tax (CFE) that may be owed.
You can fill out your P0i form in a completely dematerialized way on the INPI website. However, it is at this stage that you must choose your tax regime, be careful to choose the one that suits you best.
Don't know how to choose, or even what the existing regimes are? Don't panic!
The steps following the LMNP declaration
You have submitted your documents and registered your LMNP activity, all that remains for you to do is:
Create a professional space on impots.gouv.fr to manage your tax obligations online, including the payment of CFE each year.
Maintain meticulous accounting records if you have opted for the real regime. You can rely on an accountant to simplify your declarations.
Once again, Beanstock takes care of all the accounting management for its clients who have subscribed to the accounting management service.
