Article of 15/03/2024 updated on 15/07/2025
Non-professional furnished rental (LMNP) is a tax status applicable to people who rent out one or more furnished accommodations, without carrying out this activity professionally.
It meets a precise definition and is subject to a particular tax and social regime but it offers attractive tax optimization, without the constraints of professional status.
We will briefly describe the rules related to this activity.
We will first give a definition of classified tourist accommodation, but you can however refer to our article entitled “The different categories of tourist accommodation and their regulations” on this website, in order to better understand the various forms of tourist rental.
To designate non-professional furnished rental, we will use the acronym “LMNP” throughout this article.
I – Definition of LMNP
- This is the rental of apartments equipped with furniture and sometimes accompanied by services (guest rooms, residential hotels, etc.). In those of an apartment rental, it must include all the elements necessary for normal occupation by the tenant. The list of these elements is provided by the decree N ° 2015-981 of July 31st 2015.
- Furnished tourist accommodation means: Individual accommodation such as a villa, apartment or furnished studio offered for rental.
It must notably include the following equipment:- Furniture
- Bedding
- Gas stove or hotplates
- Fridge
- Cooking tools
- The contractual obligations of the furnished rental company: The French Housing Act (ALUR) extended the following obligations, previously limited to unfurnished rentals, to furnished rentals for primary residences: Provision of “decent” housing, establishment of a written lease, provision of a technical inspection report to the tenant, and preparation of an inventory of fixtures.
However, a few specific rules for furnished rentals were introduced by the ALUR Act. These relate to the duration of the lease (one year for furnished rentals instead of three years for unfurnished rentals), the amount of the security deposit (two months’ rent for furnished rentals instead of only one month for unfurnished rentals), and the notice period to be observed by landlords and tenants giving notice.
It should also be noted that there is a “mobility lease”, lasting a minimum of one month and a maximum of ten months, to allow rentals for people looking for temporary accommodation (apprentices, trainees, employees on temporary assignment, etc.).
Regarding these matters, the relationship between landlords and tenants of tourist accommodation continues to be largely governed by contractual freedom. However, the legislation requires landlords to provide prospective tenants with very detailed information about the property itself, its amenities, and its surroundings. - To obtain the classification of a furnished tourist accommodation: You must make a request to the accredited or approved assessing body of your choice (appearing on the lists on the “Atout France” website) using form No. 11819* 03.
It allows you to benefit from an additional tax reduction on rental income under the micro-enterprise scheme. It also allows you to join the National Agency for Holiday Vouchers (ANCV).
The assessing body visits the accommodation. In the month following this visit, he will give you a visit certificate including the inspection report as well as the proposed decision to classify the furnished accommodation for the category mentioned in the inspection report. - Reporting obligations and administrative authorizations:
- Individuals renting out furnished accommodation intended to be occupied as a primary residence by their tenant are not required to make any prior declaration to the town hall. However, some municipalities may establish a procedure for declaring the rental of accommodation for use as a primary residence, which applies to both unfurnished and furnished accommodation.
- Regarding short-term or tourist rentals:
- If the tenant rents guest rooms (bed and breakfast), his administrative obligations are limited to a declaration at the town hall;
- If the tenant rents furnished tourist accommodation (i.e., independent housing), two situations are possible:
- If the premises in question constitute their primary residence (i.e., accommodation occupied at least eight months a year), no declaration at the town hall is generally required (except in municipalities that have implemented a prior declaration procedure for furnished tourist accommodation).
- If the premises in question are not their primary residence, a “simple” declaration or a declaration subject to registration is required in any case.
- In terms of income tax, the furnished residential rental activity is carried out on a professional basis (LMP) when the following two conditions are met (CGI article. 155, IV.2):
- The annual income (incl. VAT) withdrawn from the furnished rental activity by all the members of the tax household must exceed € 23,000;
- This revenue exceeds the other income of the fiscal household subject to income tax in the categories of salaries and wages within the meaning of article 79 of the CGI, industrial and commercial profits other than those derived from the rental activity furnished, agricultural profits, non-commercial profits and the income of managers and associates mentioned in article 62 of the CGI.
As a result, any person who rents furnished dwellings and who does not meet one of the conditions listed above is qualified as L.M.N.P.
- Nevertheless, L.M.N.P. must register as a non-professional at the registry of the commercial court on which the property depends.
- Distinction between long-term rental from seasonal rental:
A furnished rental is said to be seasonal when the accommodation is rented per night, week or month, and for a maximum period of 90 consecutive days, to passing customers who do not take up residence there.
When the accommodation is rented for a period of one year (or 9 months for a student) and the tenant makes it their main residence, this is referred to as long-term rental.
For residences with hotel services rented to an operator via a commercial lease, the owner of the accommodation is deemed to be doing long-term rental.
II – Tax characteristics
1 – Exemption cases
Income from the furnished rental of part of the principal residence is not taxable in the following cases:
- When the rented rooms do not constitute the main residence of the tenant if the annual rental income does not exceed € 760. It can be an occupation by the day, the week, the month, etc.
- When the rented rooms are the main residence of the tenant. In this case, the rental price must be lower than a threshold published each year by the administration.
2 – Taxation schemes
All furnished rental income is taxable in the category of Industrial and Commercial Benefits (B.I.C.).
- Micro scheme
The turnover thresholds below which BIC taxpayers are automatically eligible for this scheme, as well as the applicable tax reduction rate, are set respectively at:
- €15,000 and 30% for lessors of unclassified furnished tourist accommodation;
- €77,700 and 50% for other lessors of furnished accommodation.
Thus, the €77,700 threshold and the 50% tax reduction rate particularly concern owners of furnished accommodation rented as a primary residence, owners of classified furnished tourist accommodation, owners of guest rooms, and taxpayers renting condominium units to operators of serviced residences.
The micro scheme only ceases to apply if the threshold is exceeded for two consecutive years.
Precision: The 30% and 50% deductions include all expenses including depreciation allowances. It cannot be allowed to result in a fiscal deficit.
- Real scheme
This regime can be applied compulsorily (see above) or optionally. This can be exercised within the deadline for filing the overall income tax return.
This tax system allows the operator to deduct all expenses actually incurred as well as, when the building is listed as an asset, depreciation charges on all investments. The basis for calculating depreciation is the cost price of the rental accommodation, excluding the value of the land on which it is based.
There are two points to note, however:
- With the exception of lessors covered by the para-hotel regime (for whom the depreciation recorded is deductible without limitation of amount), the depreciation charge cannot exceed the difference between the total rents collected and the total of other expenses. This means that depreciation cannot generate a deficit. The non-deductible portion of depreciation can be carried forward without limitation.
- In the event of a deficit, when the expenses are higher than the rents collected, this one can only be carried forward on the profits of the 10 following years of LMNP.
3 – Capital gains taxation
Capital gains made on housing transfers, only by furnished rental companies who do not have the status of professional furnished rental company are subject to the real estate capital gains regime. On the other hand, capital gains relating to other fixed assets such as furniture, as well as all capital gains made by furnished rental companies which fall under the para-hotel regime are subject to the professional capital gains regime.
- Capital gains subject to the real estate capital gains regime
Capital gains on real estate are subject to tax calculated at a rate of 19% as well as social security contributions applicable to income from assets (currently 17.2% in total).
The gross capital gain is calculated as the difference between the transfer price stipulated in the deed of sale or contribution to the company and the purchase price. From this amount, the acquisition costs are deducted (these can be assessed at a flat rate of 7.5% of the purchase price).
In addition, construction or expansion expenses can also be deducted provided they have not already been deducted from taxable rental income.
Since February 15th 2025, the amount of the purchase price must be reduced by the amount of depreciation deducted during the rental period (for taxpayers subject to the real system).
The net amount of the capital gain thus determined is subject to a tax reduction based on the length of time the property has been held. This tax reduction results in a total exemption after 30 years of ownership.
It should also be noted that an additional tax applies to capital gains exceeding €50,000.
- Capital gains subject to the professional capital gains regime
These capital gains are determined by the difference between, on the one hand, the sale price of the asset (or its estimated value in the event of transfer to private assets) and, on the other hand, its acquisition price reduced by the amount of depreciation applied since the beginning.
4 – VAT
The rules for professional and non-professional renters are the same.
The rate is in principle 10%, but the furnished rentals of dwellings are exempt from VAT.
Only the following rentals are subject to VAT:
- Accommodation in classified residences or tourist hotels;
- The provision of a furnished room with services similar to those offered by the hotel establishments (see the second part named “Hotel or hotel-type accomodation services” of our article named “VAT news: Two useful information“);
- Rental of bare premises to the operator of a hotel establishment.
There is a VAT exemption on furnished rentals subject to this tax, when the total rent received by the lessor during the previous year does not exceed the threshold of 85,000 euros (excluding taxes).
5 – Various taxes
- CFE
All furnished renters are indebted. However, exemptions exist in the following cases:- Occasional rental of part of the main residence,
- Current rental of part of the principal residence at a reasonable price,
- Rent of all or part of the main residence in furnished tourism. In this case the local authority may oppose the exemption.
- Taxe d’habitation sur les résidences secondaires (THRS)
It is established in the name of the persons who have the taxable premises. It is due for all furnished residential premises other than as a principal residence, even if they are also subject to the business property tax (CFE). On the other hand, premises used exclusively for professional purposes are not subject to it.
If a taxpayer requests to be relieved of the THRS, he must establish that he rented out his property for the entire year and was not able to use it outside of these periods. - Tax on real estate fortune (I.F.I.)
Since the activity is not professional, the value of the premises must be included in the I.F.I base. However, in certain cases, buildings owned by the taxpayer and assigned (by him or by an intermediary company) to his furnished rental activity are totally or partially exempt from IFI if the following conditions are cumulatively met:- the owner, a natural person, carries out this activity as his main activity and generates more than €23,000 in annual revenue;
- and he withdraws from this activity more than 50% of the income of his tax household subject to income tax under the following categories: salaries and wages, industrial and commercial profits, agricultural profits, non-commercial profits, income of managers and associates.
III – Social regime
1 – Activity carried out as a sole proprietorship
- Social scheme on rental income
The LMNP is not subject to social security contributions on labor income if it meets the conditions set by the tax administration (income less than € 23,000 including tax and less than other professional income of the tax household).
If he is a seasonal rental company, the sole condition of achieving an annual turnover not exceeding € 23,000 is sufficient to be exempt from social security contributions on earned income.
In these two cases, the income from the furnished rental is taxed with social security contributions on income from assets (at the rate of 17.20%).
- Social regime on capital gains
The LMNP is taxed under the real estate capital gains regime for individuals with some particularities (see above) on real estate capital gains realized within the framework of this activity.
2 – Activity carried out in a tax-transparent company
These companies are those for which the partners are taxed with income tax on the amount of their remuneration and on their share of profit. The company is not taxed in corporation tax. This mainly concerns the partnerships (SNC), the EURL and the family SARL.
Here the criteria for distinguishing between professional and non-professional lessor are at the level of management, depending on whether it is majority manager or not:
- Majority managers are subject to all social security contributions from self-employed workers calculated on their share of the profit, whether or not it is distributed and, where applicable, on the remuneration allocated by the company.
- Minority managers are subject to employee social security contributions excluding unemployment insurance on the basis of their remuneration. On the other hand, their share of the BIC is taxed as social security contributions on income from assets.
- The other partners are taxed with social security contributions on income from assets of 17.20% on their share of BIC.
- Regarding capital gains, the criteria are identical to those for furnished rentals in a sole proprietorship. It is therefore necessary to determine whether each partner is professional or non-professional according to the criteria used for the calculation of income tax (see above: Definition of LMNP).
3 – Activity carried out as a company subject to corporation tax
In this hypothesis, there is no specificity linked to the furnished rental activity carried out by the company. Income and capital gains fall within the scope of corporation tax. The question of the social system is irrelevant.
IV – The situation of non-residents at the tax level in France
1 – Definition of LMNP for non-residents
The non-resident working in a sole proprietorship will have LMNP status within the meaning of income tax if he meets the following two criteria:
- the worldwide receipts from the furnished rental activity are less than or equal to € 23,000 including tax;
- the annual income withdrawn from the furnished rental activity by all members of the tax household must not exceed the other income from activity of the tax household taxable in France.
2 – Social scheme for rental income
As we saw above, LMNP income is not subject to social security contributions. Thus, as soon as a non-resident receives less than €23,000 from furnished rental products, he will most of the time be exempt from social security contributions. Indeed, other income from French sources is often low for non-residents.
Regarding social security contributions, people residing outside the European Economic Area or Switzerland are subject to a levy at the rate of 17.20%. On the other hand, non-professional renters who are covered by the social security regime of an EEA state (European Union, Iceland, Norway, Liechtenstein) or Switzerland, bear a levy whose rate is reduced to 7.50%.
Indeed, LMNP residing in one of these States are exempt from paying the CSG and CRDS, but remain liable for the solidarity levy.
3 – Real estate capital gains tax regime
A withholding tax at the rate of 19% is applicable on the taxable capital gain calculated according to the rules applicable for private real estate capital gains.
The status of LMNP responds to a very large number of particular rules that we cannot expose here in their entirety. Do not hesitate to contact us for any question on this subject!
