French property taxes and furnished rental taxes

You own property in France and you have decided to rent it out furnished? Let us guide you through the administrative process step by step!

1. Choose your income tax "régime" wisely

As a furnished property landlord, you have the choice between two very different income tax regimes for the taxation of profits from furnished property:

Le régime des plus-values des loueurs en meublé non-professionnels (in french)

• The Micro-BIC regime: 50% lump sum allowance on your annual turnover
  You are de facto eligible for Micro-BIC if your gross revenue does not exceed 77 700€
• The Réel Simplifié regime: you can deduct your annual charges and amortization of the property and furniture. This is usually the most beneficial tax regime in 85% of all cases as it allows landlords to pay less taxes on this revenue, if any.

If your eligible costs and amortization exceed 50% of your gross revenues, then the best choice is the Réel Simplifié regime.

Here is a list of the main expenses you can deduct :
- furniture
- notary and agency fees if the purchase is a property investment and you haven't lived in it.
- renovation works
- property insurance
- local property taxes
- common area maintenance charges
- rental management costs (agency fees)
- loan interests and fees associated with said loan
- loan insurance
- depreciation of the property
- depreciation of the furniture

To find out in 1 minute which tax regime suits you, you can use our free simulator (if you are not a resident of France, your tax rate is 20% on all your french income + 17,2% of social security deductions).

2. Register your activity

The first step however, wether you choose the Micro-BIC or Réel Simplifié, is to register your business on Infogreffe's website, (or if the property is located in Overseas Departments, to fill out a P0i form).

At this step, you have to check the chosen tax regime and point out the date your activity started. It could be the date you bought it, which will help you deduce the purchasing charges, or the day the rental began if you lived in the property before or if it was rented out unfurnished. Here is the link to help you to fill out the form. (in french)

You will then receive a SIRET number which will help you fill out the Tax Return (liasse fiscale 2031-2033) and send it to the financial administrator.

3. The tax return

The Micro-BIC regime : All you have to do here is declare your gross revenues on the annexe 2042 C PRO of the regular tax return 2042 in the Micro-BIC regime's box.
The deadline to send it to the financial administrator is late may/early june.

The Réel Simplifié regime : Under the régime Réel Simplifié, a special tax return called 2031-2033 is necessary. It's the equivalent of the balance sheet and income statement for this activity.
The deadline is on the second working day in May.
You then have to copy the fiscal result on the annexe 2042 C PRO of the regular tax return 2042 in the Réel Simplifié regime's box.

Our consulting firm offers 2 services to fill out and send to the Tax Office this tax return. One with an online app and the other with the help of our expert accountant. For more information about our offers, please click here.

4. LMNP or LMP ?

Non-professional furnished rental (LMNP)

Every owner of a furnished rental accommodation becomes a non-professional furnished rental (LMNP) lessor if:

• The annual income from furnished rental activity generated by all the members of the tax household remains under the limit of € 23,000.
• The annual rental income is inferior to other income earned in France by the household.

Professional furnished rental (LMP)

Professional furnished rental (LMP) has to satisfy the two cumulative following conditions :

• The annual rental income (rents and expense from France and abroad) of the tax household has to exceed €23,000.
• The annual rental income has to exceed the other professional income earned in France by the household.

According to the Social Security financing law for 2021, Professional landlords (LMP) are now required to register with the self employed workers' compulsory Social Security coverage (Sécurité Sociale des Indépendants). Thus, they will have to pay social contributions.
However, a decree may soon be issued concerning the situation of non-resident European landlords. In fact, in Europe, each taxpayer is normally subject to only one country's social security laws at a time.

Capital gain taxes :

If the owner has been a professional furnished rental lessor for at least 5 years and decides to sell his property, the gain is not taxable, unless his revenue exceeds €90,000 (or €250,000 for a classified furnished property).
The professional furnished rental status (LMP) includes other specific aspects concerning wealth tax on real estate. Please contact our English speaking team for more information.

Specificities of short-term rental (both LMP and LMNP) :

Short-term rental owners whose annual rental income is above €23,000 are required to register with the self employed workers' compulsory Social Security coverage (Sécurité Sociale des Indépendants), unless a property management mandate is given to a real estate professional headquartered in France. If the income is negative, the property owner has to to pay a minimum contribution (around €1,500).