LMNP: Definition, operation, and tax advantages
Oct 30, 2025
3 minutes
Real estate investment is increasingly attracting French people wishing to grow their savings and build a sustainable asset. But faced with tax pressure and new regulatory constraints, many are looking for a strategy that is both profitable, easy to manage, and tax-optimized. This is where the Non-Professional Furnished Rental (LMNP) status becomes a reference.
The LMNP allows you to rent a furnished property while benefiting from a reduced tax structure, particularly thanks to the ability to depreciate the property and deduct most expenses. In other words, you can receive rents that are minimally or not taxed, while developing a valuable asset in the long term.
This regime appeals to both beginner investors, who want to get started with peace of mind, and experienced landlords, keen to optimize the profitability of their real estate portfolio. It combines high rental yield, flexibility of the furnished lease, and a secure legal framework.
What is the status of a Non-Professional Furnished Lessor (LMNP)?
Definition and Principles of Non-Professional Furnished Rental
The status of Non-Professional Furnished Landlord (LMNP) applies to anyone who rents a furnished property as a non-professional activity, meaning this activity is not their main source of income. Specifically, it involves renting out a living space equipped with all the necessary furniture for the tenant's daily life: bed, table, chairs, appliances, dishes, etc.
The objective of LMNP is twofold: to generate rental income while benefiting from lightened taxation. Unlike empty rentals, the rents received are considered as Industrial and Commercial Profits (BIC), and not as property income. This changes everything, as the owner can amortize the property and deduct many expenses, which significantly reduces taxation.
In practice, LMNP allows one to transform a classic rental property into a source of nearly tax-free income for several years, thanks to the combination of the real regime and the amortization mechanism. This is what makes it one of the most advantageous statuses for rental real estate investment in France today.
Eligibility Conditions for LMNP Status
To benefit from LMNP status, one must meet certain simple but strict conditions. First, the income from furnished rental must not exceed €23,000 per year or 50% of the total income of the household. Beyond this, the owner falls under the regime of Professional Furnished Landlord (LMP), which involves different obligations and taxation.
The landlord must also provide a furnished accommodation compliant with the law, which means equipped with the minimum furniture defined by the decree of July 31, 2015: bedding, table, seats, cooking plates, dishes, lighting, cleaning equipment… Without these items, the rental cannot be considered furnished.
Finally, the landlord must declare their activity with the commercial court registry by requesting a SIRET number. This quick formality (via the P0i form) allows one to report the furnished rental activity to the tax administration and access the specific regimes of LMNP. A light administrative step for a powerful tax framework.
LMNP vs LMP: Understanding the Crucial Difference
The distinction between LMNP (non-professional) and LMP (professional) is based on two criteria: the amount of rental income and its weight in the total income of the household. LMNP remains the norm for the majority of individuals, while LMP concerns investors for whom furnished rental becomes a primary activity.
The LMP status allows deficits to be deducted from global income and offers a potential exemption from capital gains under certain conditions, but it also involves higher social contributions. In contrast, LMNP maintains a simple management, flexible taxation, and taxation limited to social contributions.
In summary, the LMNP is the perfect compromise between administrative flexibility, optimized returns, and tax benefits. It is the ideal entry point to build a profitable real estate portfolio, without excessive complexity or heavy social charges.
The practical operation of LMNP investment
The steps to become a non-professional furnished rental (LMNP)
Becoming a non-professional furnished rental is within everyone's reach. The first step is to acquire a property intended for furnished rental, whether it is a studio, an apartment, or a service residence. This property must then be equipped according to the official list of mandatory furniture, in order to meet the legal criteria for furnished rental.
Once the accommodation is ready, the landlord must declare their activity by completing the P0i form (Cerfa n°11921*05) with the clerk of the commercial court that has jurisdiction over the property. This declaration allows obtaining a SIRET number, which is essential for accounting and tax management. The landlord must then choose their tax regime: micro-BIC or simplified real, depending on their objectives and the level of their rental income.
Finally, it is advisable to maintain rigorous accounting, especially if opting for the real regime. The use of an accountant is common, particularly for recording depreciation and deductible expenses. It is a modest investment that ensures tax compliance and optimizes the net return on the property.
Property management in LMNP
The management of a property in LMNP can be carried out directly by the owner or entrusted to a professional. In the first case, the landlord must manage the rental themselves, including conducting inventory checks, drafting the furnished lease, collecting rents, and maintaining the accommodation. This approach offers better control but requires time and a good understanding of the regulations.
In the case of delegation, professional property management secures income and brings peace of mind. The agency takes care of everything: tenant selection, payment management, administrative follow-up, and property maintenance.
The choice between direct management and delegated management depends on the investor's profile. Those aiming for maximum profitability will often prefer autonomous management, while those seeking passive income will prefer to delegate to focus on acquisition strategy and the development of their real estate assets.
The LMNP tax system: the heart of tax advantages
The Micro-BIC regime: simplicity and flat-rate allowance
The Micro-BIC (Industrial and Commercial Profits) regime is the simplest formula for owners in LMNP (Loueur en Meublé Non Professionnel). It automatically applies when annual rental income does not exceed €77,700 (2025 threshold). In this framework, the landlord simply declares the gross amount of their rents in their income tax return, without deducting their actual charges.
In return for this simplicity, the tax administration applies a flat-rate allowance of 50%, which is supposed to represent the charges and expenses. In other words, only half of the rents is subject to tax. This regime is therefore particularly suitable for small landlords or beginner investors who wish to avoid the complexity of full accounting.
However, this simplicity has its limits: if actual charges (interest on loans, insurance, property tax, maintenance, etc.) exceed 50% of income, the real regime becomes more advantageous. The Micro-BIC offers a good entry point, but it does not allow for fully exploiting the tax advantages of LMNP.
The simplified real regime: maximum tax optimization
The simplified real regime is the true engine of the LMNP status. Unlike the Micro-BIC, it allows for deducting actual charges related to the rental activity, as well as depreciating the property and its furnishings. Depreciation involves spreading the cost of an asset over several years, reflecting its loss of value over time — a remarkably effective accounting technique for reducing taxable income.
In practice, this means that most owners in LMNP under the real regime pay virtually no tax on their rents for several years. Between depreciation, financial charges, and maintenance costs, the tax result can be zero or very slightly positive, all while receiving a real cash flow.
This regime requires a structured accounting, often entrusted to an accountant, but the effort is worth it. For an investor wishing to build wealth and maximize net profitability, the LMNP real regime is the key to optimized and sustainable taxation.
Comparative analysis: Micro-BIC vs Real Regime
Let’s take a concrete example to understand the difference between these two regimes. Imagine a furnished apartment generating €12,000 in annual rents, with €6,000 of actual charges (loan, property tax, insurance, maintenance…).
Under the Micro-BIC regime, the 50% allowance reduces the taxable income to €6,000, subject to income tax and social contributions.
Under the Real Regime, the owner deducts their €6,000 in charges, and can also depreciate part of the property (for example, €4,000 per year). The tax result then becomes zero or negative — therefore no tax to pay on the rents received.
This simple calculation shows why the real regime is favored by the majority of LMNP investors: it transforms taxable income into net income, while maintaining the flexibility of non-professional status.
The concrete and strategic tax advantages of the actual regime
Depreciation: the key mechanism for almost tax exemption
One of the pillars of the LMNP under the real regime is the mechanism of accounting depreciation. In real estate, depreciation is the process of spreading the cost of the property, furniture, and equipment over several years to reflect their natural wear and tear. This depreciation is not a real expense, but it is tax-deductible, significantly reducing the taxable profit.
Specifically, a property worth €200,000 can be depreciated over 25 to 30 years, and its furnishings over 5 to 10 years. Each year, the owner deducts a fraction of this value while continuing to receive their rent. This creates a formidable tax effect: rents are often almost non-taxable for a long period.
Let's take a simple example: a property depreciated at €7,000 per year, with €6,000 in net rent after expenses, will show a zero tax result — therefore no tax on these revenues. The owner actually receives their cash flow. This is what makes the LMNP a remarkably effective status for investors looking to maximize their net income.
Deductions of actual expenses: optimizing rental income
In addition to depreciation, the LMNP under the real regime allows for deducing all expenses related to rental activity: loan interest, management fees, non-occupying owner's insurance (PNO), property tax, accounting fees, maintenance work, or even small equipment.
This deduction reduces the taxable profit and adds to the depreciation to neutralize a large portion of rental income. Thus, even in cases of high profitability, the landlord pays very little — if any — tax on their rent.
For example, an investor who receives €15,000 in rent and incurs €5,000 in actual expenses will see their taxable profit drop to €10,000. If we add €7,000 in depreciation, their result becomes zero while continuing to generate actual income. A winning long-term strategy to grow an estate without increasing its tax burden.
VAT recovery in LMNP: a specific opportunity
In certain cases, especially when the property is operated within a service residence (student residence, EHPAD, business or tourism), the owner can recover the VAT paid on the purchase price. This represents up to 20% of the total amount of the rental investment, considerable savings.
This recovery is only possible if the commercial lease signed with the operator of the residence meets certain conditions, notably the provision of para-hotel services (reception, cleaning, breakfast…). In return, the investor commits to keeping the property for at least 20 years, or else they will have to repay part of the VAT.
This device, often overlooked, further enhances the attractiveness of the LMNP in managed residences: it allows for a significant reduction in acquisition costs and improves net profitability from the very first years.
The specifics of the LMNP and points of attention
The LMNP in serviced residences
The LMNP in serviced residences attracts many investors looking for simplicity and stability. In this model, the owner acquires a property within a residence operated by a professional manager (student residence, nursing home, business or tourism). In exchange, they sign a commercial lease with the operator, who takes care of the complete management of the property: finding tenants, maintenance, collection of rents.
The main advantage of this formula is the guarantee of regular rent, regardless of the actual occupancy rate. The landlord receives a constant income, without management constraints. Additionally, this type of investment often allows for the recovery of VAT, provided that the property is held for 20 years.
However, it is important to remain attentive to the solidity of the manager and the conditions of the commercial lease. Some clauses may limit flexibility or make it difficult to resell before the term. The LMNP in managed residence is therefore an ideal solution for a passive investor, but it requires a rigorous analysis of the contract and the operating partner.
The accounting and reporting obligations of LMNP
Even though the LMNP status offers great flexibility, it is still subject to some administrative and accounting obligations, especially under actual regime. The landlord must maintain accounting in compliance with tax standards, record depreciation, keep invoices, and produce a specific declaration each year (form no. 2031).
In practice, most investors hire a specialized accountant. This person takes care of the accounting, the declaration, and the tax follow-up. This cost (typically between 300 and 600 € per year) is itself deductible, making it neutral or almost so.
It is also noteworthy that the landlord must register with the commercial court registry via form P0i, obtain a SIRET number, and pay the Business Real Estate Tax (CFE). This tax is due annually, even in cases of low activity, but its amount remains modest (around 100 to 300 € depending on the municipalities).
The Business Real Estate Tax (CFE) in LMNP
Many landlords discover the CFE after their first LMNP income declaration. This tax, established by law, applies to any activity carried out on a regular basis, including non-professional furnished rentals. It is collected by the municipality and funds local economic services.
Its amount varies depending on the location of the property and the cadastral rental value, but remains generally low. Some municipalities grant an exemption during the first year of activity, but this is neither automatic nor mandatory. It is therefore essential to check the tax policy of the relevant municipality with the corporate tax office (SIE).
The CFE is not a punitive tax, but a normal component of LMNP activity. When managed well, it does not significantly affect profitability. On the other hand, failing to declare or pay can lead to penalties: it is better to anticipate this formality from the first year of operation.
The LMNP in the long term: resale and transfer
The taxation of capital gains on real estate in LMNP
The resale of a property in LMNP is subject to the capital gains regime for individuals, and not for professionals — a major tax advantage. The capital gain is calculated as the difference between the sale price and the acquisition price, after deducting justified expenses and work.
Until recently, the depreciations applied over the years were not reintegrated into the calculation base of the capital gain. This was one of the main advantages of the LMNP status. However, since 2024, legislation has evolved: the deducted depreciations now reduce the fiscal acquisition price, thereby mechanically increasing the taxable capital gain. This reform brings the LMNP closer to the corporate regime (like SCI at IS), while maintaining a lighter taxation.
Despite this evolution, the regime remains favorable: the exemption from capital gains tax is total after 22 years of holding (for income tax) and 30 years (for social contributions). In other words, the LMNP remains an efficient tool for building a transferable estate while keeping an attractive taxation in the long term.
The transmission of the LMNP property: issues and taxation
Transmitting a property held under the LMNP status follows the classic rules of real estate succession, as the property remains a personal asset. It enters the succession of the owner and benefits from traditional inheritance deductions (€100,000 per parent and per child every 15 years).
However, the LMNP can also be integrated into a patrimonial structure (like an SCI at IR or a family SARL) to facilitate transmission while maintaining collective management of the estate. This strategy allows avoiding joint ownership, distributing shares, and planning the gradual transmission of capital.
The key to a successful transmission lies in anticipation. By combining the benefits of LMNP with the tools of property law (donation, dismemberment, life insurance), it is possible to protect one's heirs while optimizing inheritance tax. Support from a notary or a wealth management advisor is therefore strongly recommended.
Conclusion: The LMNP, a powerful and sustainable asset lever
The LMNP status remains, despite recent tax changes, one of the most effective schemes for generating net rental income after tax and building solid assets. Its flexibility, advantageous taxation, and accessibility make it an ideal tool for investors wishing to develop their financial independence.
From property management to inheritance, the LMNP offers a rare balance between simplicity, yield, and security. When used correctly, it allows for leveraged purchases, tax depreciation of the rental investment, and long-term capital gain on the property's value.
More than just a simple tax status, the LMNP is a real wealth strategy, capable of transforming a simple rental project into a source of stable, optimized, and transferable income.
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