Acquiring a property intended for rental is an important decision, but it is only the beginning of the adventure. A key question arises quickly: but which tax regime should I choose to maximize the profitability of my investment?
Furnished rental vs unfurnished rental: a fundamental choice for your taxation
Before choosing a tax regime, you must decide between unfurnished and furnished rental. This choice, often underestimated, influences not only the legal nature of your lease but especially the type of taxation to which your rents will be subjected.
What is an unfurnished rental?
An unfurnished rental consists of renting out an unfurnished property. In practice, this means that the housing has no furniture or equipment, except for sanitary installations and a sink. This is the most common format in France.
From a tax perspective, the rents received in this framework are considered property income. They can be declared under two different regimes:
The micro property regime: simplicity and automation
Your gross rental income (excluding charges) must be less than €15,000 per year.
You will benefit from a flat rate deduction of 30%, without having to justify your expenses.
Very easy to manage, no charge calculations to perform.
However, this regime is not optimal if you have many charges (work, loan interest, etc.).
The actual property regime: interesting if you have significant charges
No income ceiling.
You deduct all your actual charges (loan interest, work, property tax, management fees...).
If your charges exceed your rental income, you can create a property deficit deductible from your global income up to €10,700 per year.
Excellent tax lever in case of work or recent acquisition.
The declaration is more complex and generally requires accounting support.
What is a furnished rental?
A furnished rental involves providing the tenant with a property ready to be inhabited immediately. Since 2015, a decree specifies the mandatory furniture and equipment that you can find on this site.
In terms of taxation, income from furnished rental is not considered property income, but rather as BIC (industrial and commercial profits). They grant access to more flexible tax regimes that are often much more advantageous.
Tax regimes for furnished rentals: LMNP, LMP, and depreciations
The furnished rental offers more accounting flexibility and, above all, more tax optimization. This framework is highly appreciated by real estate investors looking to maximize their net profitability.
The LMNP status: the reference for individual investors
The Non-Professional Furnished Lessor (LMNP) is the preferred tax regime for individuals who want to invest in furnished rental real estate while optimizing their taxes. To be eligible, your furnished rental income must meet at least one of these two conditions:
Be less than €23,000 per year,
Represent less than 50% of your total professional income.
Next, two tax options are available to you:
The Micro-BIC regime: simplicity above all
Income ceiling: €77,700 per year.
Flat-rate deduction: 50% on declared rents.
Advantages: very simple procedures, no obligation to justify your expenses.
Limit: less advantageous if you have significant actual expenses (loan interest, work, furnishings).
The Simplified Real regime: the strategy to optimize your income
No income ceiling, as long as they remain below 50% of your total income.
Deductions: all your actual expenses (insurance, loan interest, management fees…) + depreciation of the property (excluding land) and furniture.
Strong point: possibility to neutralize the tax on your rents for 10 to 15 years thanks to depreciation.
The LMP status: for professional or patrimonial investors
To be eligible for the LMP, your income from furnished rentals must exceed €23,000/year and represent more than 50% of your total professional income.
There are also specific tax rules:
Taxation under the mandatory real regime.
Registration in the Trade and Companies Register (RCS).
Possibility of total exemption from capital gains after 5 years of holding (if revenues are below €90,000)
Deduction of social charges (Social Security for Independents).
This system can prove to be very advantageous in cases of high profitability or a desire to transfer. However, it requires rigorous organization and entails affiliation with the independent regime.
Investing through a company: SCI, SARL and taxation under corporate tax
Some investors prefer to hold their real estate assets through a company.
The SCI under income tax: suitable for bare rental
The regime is transparent because the income is directly declared by the partners in their income tax. But this is only compatible with bare rental. If you rent furnished property via an SCI under income tax, you are automatically requalified to corporate tax (IS).
The SCI or SARL under corporate tax: depreciation and corporate taxation
Income is taxed under corporate tax. You can depreciate the property, which helps to significantly reduce the taxable result.
Why do some investors choose this structure?
Accounting depreciation = reduction of the taxable base.
Full deduction of actual expenses.
Asset management strategy: ideal for separating rental management and personal assets.
Disadvantages to be aware of
Taxation on the capital gain calculated not on the purchase price, but on the net book value (often much lower).
Accounting and legal complexity (chartered accountant essential).
A poor tax choice can reduce your project's profitability by several thousand euros. Conversely, a good decision can transform an ordinary investment into a source of optimized (non-taxable) passive income for years.
Comparison of tax regimes based on the type of rental
Type of rental | Tax Regime | Type of income | Deductions/depreciation | Complexity |
|---|---|---|---|---|
Unfurnished rental | Micro-property | Property income | 30% flat rate | Very simple |
Unfurnished rental | Real property | Property income | Actual deductible charges | Average |
Furnished rental (LMNP) | Micro-BIC | BIC | 50% flat rate | Very simple |
Furnished rental (LMNP) | Simplified real | BIC | Depreciation charges | Technical |
Furnished rental (LMP) | Simplified real | Professional BIC | Depreciation charges | High |
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