Among the different tax regimes offered to real estate investors, furnished rental provides significant advantages, notably thanks to the possibility of depreciating the property and deducting numerous expenses.
Understanding the basics: commonalities between LMNP and LMP
The two statuses fall under the same income regime: BIC (industrial and commercial profits). Unlike traditional rental income (unfurnished rentals), BIC income allows for a more flexible accounting approach, with the possibility of utilizing depreciation of the asset and detailed expense deductions.
Main common advantages
Depreciation of the asset (excluding land)
Expense deductions: loan interest, insurance, work, property tax, management fees...
Possible tax exemption for several years thanks to deductions and depreciations
Accessible tax regimes
Micro-BIC (50% deduction on receipts) if income < €77,700 (LMNP only)
Real simplified: actual declaration with mandatory accounting (LMNP and LMP)
The LMNP status: flexibility and accessibility for individuals
Access Conditions for LMNP Status
To be considered as Non-Professional Furnished Lessor (LMNP), the annual income derived from furnished rental must be less than €23,000, or it must remain below other professional income of the tax household (salaries, non-commercial profits, etc.).
If these two conditions are not met, you automatically transition to LMP.
Tax Treatment in LMNP
Declaration in the category of Non-Professional BIC
Option to choose the real regime to depreciate the property
BIC deficits are carried forward only against LMNP BIC income for 10 years
Social Treatment in LMNP
No SSI social contributions
Social levies (17.2%) on the taxable result
Taxation in Case of Resale
Regime for individual capital gains
Complete exemption possible after 22 years for income tax and 30 years for social levies
Ideal Profile: this is a private investor receiving moderate rental income, whose main objective is to build a pension and prepare for the transfer of their assets.
The LMP status: for professional or wealth investors
Access Conditions for the LMP Status
To be a Professional Furnished Lessor, you must cumulatively meet the following conditions:
Have rental income > €23,000/year, and
Ensure that this income represents more than 50% of the family's professional income
Registration with the Trade and Companies Register (RCS) is no longer mandatory since 2020.
Tax Treatment under LMP
The status of LMP implies a declaration of income in the category of professional BIC. It allows for depreciation (the real regime is then mandatory) and allows losses to be offset against global income without a ceiling, with the possibility to carry these losses forward for six years.
Social Treatment under LMP
Mandatory affiliation to the SSI regime (formerly RSI)
High social contributions (approximately 30% of taxable earnings, minimal in case of losses)
Taxation in the event of resale
The status of Professional Furnished Lessor falls under the professional capital gains regime, with the possibility of benefiting from a total exemption if the activity has been conducted for more than five years and if revenues remain below €90,000 on average per year over two years.
Ideal profile: this investor generates a strong rental yield and wants to offset losses against their overall income. Their project is part of a professional or long-term approach, with an anticipated succession in sight.
How to choose? Our practical advice
Case #1: You invest alone with a low-rent property
Rental income < 15,000 €/year, low expenses
Recommended choice: LMNP micro-BIC for simplicity
Case #2: You have a 20-year mortgage
Strong bank leverage, useful depreciation
Recommended choice: LMNP real to optimize taxation
Case #3: You manage multiple properties and are part-time or retired
Income > 23,000 €, low professional income
Recommended choice: switch to LMP to benefit from exemptions on resale
The choice between LMNP and LMP is not solely based on the level of rental income. It also depends on your wealth management goals, your family situation, your administrative tolerance, and your long-term strategy.
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