Short-term rentals (Airbnb type), classic furnished rentals (new or old) and tourist residences are the main ones impacted by this reform. Service residences (students, seniors, EHPAD, establishments for disabled people) are not affected. Thanks to its unique positioning in the real estate investment market, Valority allows you to benefit from status LMNP while escaping this new device.
With more than 15 years of expertise, our manager Les Belles Années now manages 8,800 student accommodations across France. By investing in one of our student apartments, you benefit from a turnkey commercial lease, without the constraints of rental management, while escaping the changes brought by the PLF 2025.
Reminders on how the LMNP status works
The LMNP is aimed at owners offering furnished real estate for rental. To be eligible, it is necessary that the accommodation meets certain equipment criteria guaranteeing that it is “ready to live in”. Income from this activity is taxed in the Industrial and Commercial Profits (BIC) category.
To benefit from this status, the owner must respect several conditions:
• Rental income must be less than €23,000 per year or represent less than 50% of overall revenue of the tax home.
• The good must be rented furnished, that is to say equipped to allow the tenant to live there immediately (bedding, kitchen utensils, furniture, etc.).
• A registration with the commercial court registry as a furnished rental company is mandatory.
Micro-BIC diet
The micro-BIC diet allows you to benefit from a 50% reduction on income whose amount is less than €77,700 for classic furnished rentals or classified tourist furnished rentals and guest rooms.
This means that you only declare 50% of your income and the tax is calculated on this basis. This reduction is supposed to compensate for the charges that you may have incurred (insurance, maintenance, etc.).
For unclassified furnished tourist rentals, the reduction rate is set at 30%.
Simplified real regime
The real regime becomes compulsory if rental income exceeds the ceilings of the micro-BIC regime.
Main features:
• Taxation on real profits : Net rental income is calculated by deducting all actual charges and depreciation from turnover.
• Deductible expenses :
◦ Loan interest.
◦ Condominium charges.
◦ Assurances.
◦ Rental management fees.
◦ Maintenance and renovation work.
It is also possible to defer depreciation in the event that the activity of the furnished rental company is in deficit.
Actual depreciation is an accounting mechanism which allows owners of furnished rented properties to deduct, each year, part of the value of their property from their taxable rental income.
The depreciation period generally varies between 25 and 40 years, but it can be shorter for certain items such as furniture. This is particularly the case for furniture, household appliances and even kitchen equipment. In this case, the amortization is faster, often over 5 to 10 years.
new 2025 measures in application
Following the vote of deputies this Wednesday, February 5, 2025 against the motions of censure tabled against the government, the Finance law for 2025 is definitively adopted and entered into force. The law thus provides for the reintegration of depreciation into the calculation of capital gain.
Here are the changes to the LMNP status since the 2024 Finance Law:
Modification of annual income limits:
• No change for long-term furnished rentals, leases of 1 year minimum or 9 months in service residence, the threshold remains at €77,700
• Unclassified furnished tourist accommodation: the ceiling increased from €77,700 to €15,000
• Classified furnished tourist accommodation, guest rooms and gîtes: the threshold drops to €77,700
Reduction of the flat-rate deduction:
• Long-term furnished rentals: the rate remains unchanged (50%)
• Unclassified furnished tourist rentals: the rate went from 50 to 30%
• Classified furnished tourist rentals, guest rooms and gîtes: the rate remains unchanged (71%)
An additional flat-rate reduction of 21% is possible for furnished tourist accommodation in non-tense areas, such as rural areas, and whose turnover excluding tax does not exceed €15,000. In this situation, the reduction can increase to 92%.
Reinstatement of depreciation in the calculation of capital gains:
Amendment No. I-CF2975 of the PLF 2024 once again integrated the depreciation carried out during the rental period in the calculation of the taxable capital gain. This measure potentially increases taxation when the property is sold, reducing the tax advantage previously granted to LMNPs. Article 24 of the PLF 2025 provides for a complete reintegration of depreciation carried out when calculating the capital gain on resale, with the exception of goods in service residences such as student residences.
In the case of a property purchased for €100,000 resold for €180,000 and you depreciate €20,000, the amount of taxable capital gain as it stands is €80,000. With the PLF LMNP 2025 potential, the tax would be €100,000.
The inclusion of depreciation in the calculation of capital gains tax would result in an increase on the resale of a property in LMNP. The tax rate for the individual capital gains regime is 19%, coupled with compulsory social security contributions of 17.2%.
Reintegration of depreciation into
the calculation of capital gains: what consequences?
As a reminder, thedepreciation in LMNP under the simplified real regime is a accounting mechanism which allows you to spread the cost of acquiring real estate and its furniture over several years. The objective is to reduce the taxable income of the lessor, and thus, to optimize the taxation of rental income.
You can thus amortize:
• the value of the real estate (excluding land): between 20 and 40 years old (~2 to 5% per year).
• furniture and equipment: between 5 and 10 years old (~10 to 20% per year).
Depreciation is linear, meaning it is distributed equally each year over the chosen depreciation period.
By reintroducing this depreciation, the tax on real estate capital gains will be higher than before. This measure aims to encourage owners to keep their homes for a longer period of time.
However, the effect of this measure must be put into perspective! Indeed, there is a tax reduction system for real estate capital gains made according to the number of years of ownership. From 22 years of ownership, your capital gain is exempt from income tax and from 30 years from social security contributions.
Reform of the LMNP regime: before/after comparison table
