LMNP (furnished rental property): a deficit can be offset against furnished rental income for 10 years, not against overall income

No, a deficit from a non-professional furnished rental does not reduce your overall income. It is deductible only from the non-professional furnished rental income for the current year and the following 10 years. Professional landlords (LMP) are subject to a different rule: their deficit is offset against their overall income.

This page deals only with the deficit. The choice between micro-BIC and actual regime, depreciation, and capital gains are covered on another page of the site.

The rule: same type of income, ten years

The BOFiP (Official Bulletin of Public Finances) states that non-professional losses "cannot be offset against total income." They can only be offset against income derived from such an activity. Service-public.gouv.fr says the same thing: the loss is deductible from non-professional furnished rental income in the same year and the following 10 years. The tax administration's FAQ summarizes: under the LMNP (Non-Professional Furnished Rental) scheme, losses can only be deducted from future furnished rental income for 10 years.

The table compares with the two other cases that are most often confused.

The 6-year postponement of the LMP (furnished rental property) tax status comes from service-public.gouv.fr and the tax FAQ. The BOFiP (Official Bulletin of Public Finances) text consulted for this page does not mention it.

How a deficit forms in LMNP

Under the actual expense regime, taxable income is calculated by deducting actual expenses and charges. Depreciation of the purchase price of the property and furniture is also deductible. Under the micro-BIC regime, a flat-rate allowance applies (50 % for long-term furnished rentals, with a minimum of €305), and expenses are not deductible.

Depreciation is capped. For an individual, it is deductible up to the amount of rent received, less other expenses related to the rented property (Article 39 C of the French General Tax Code, as reiterated by the BOFiP). A simple example: with €9,000 in rent and €12,000 in other expenses, the limit is negative. No depreciation is deductible that year. According to the BOFiP (BOI-BIC-AMT-20-40-10-20, § 80), the portion exceeding this limit cannot be deducted for the current tax year; § 90 indicates that it may be carried forward to the taxable income of subsequent years. The duration of this carry-forward is not discussed here.

Declarations: micro-BIC on form 2042-C-PRO; actual regime with form 2031 (form 2031-SD), then transfer to form 2042-C-PRO.

Change status mid-journey

The status at the time the deficit arises matters.

• From non-professional to professional. Losses incurred when the activity was non-professional cannot be deducted from either total income or subsequent professional profits (BOFiP, § 250).
• Back to non-professional use. Losses of less than ten years not yet offset can be offset against realized profits (BOFiP, § 250).
• Loss of LMP quality. The right to offset losses against total income ends definitively (BOFiP, § 390). Any remaining losses are subject to non-professional rules.
• Exception within limits. A professional lessor from the outset can deduct, in thirds over the first three years of the lease, the portion of the deficit related to expenses incurred before the start of the lease (BOFiP, § 260). The detailed conditions are not included here.

To find out if you are a professional or not, see the sister page on the €23,000 threshold and the comparison with other incomes.

LMNP deficit over four years: a numerical example (fictitious profile)

Situation. Camille rents out a furnished studio apartment under the actual expense method. Her other household income is €60,000 per year. Assumptions for this hypothetical scenario: four years of rental, theoretical depreciation of €3,000 per year, and excess depreciation deducted as soon as a subsequent year allows. The French tax authority's official guidelines (BOI-BIC-AMT-20-40-10-20, § 90) indicate that the portion exceeding the limit may be deducted from the results of subsequent tax years; the duration of this carry-forward is not addressed here. No tax rates are used.

Issue. Year 1 ended with a deficit of €3,000 (renovations, interest, condominium fees). Camille hopes to deduct this from her €60,000 income.

Strategy. Apply the LMNP rule: the deficit remains in inventory and is offset against subsequent furnished rental income, up to a limit of ten years. The depreciation cap is applied each year, and any excess depreciation is carried forward.

Result. The €3,000 deficit does not reduce the household's €60,000 income for year 1. In year 1, the depreciation limit is zero: the €3,000 in depreciation is not deducted and is carried forward. In year 2, €6,000 in depreciation is available (€3,000 from the current year and €3,000 carried forward), but the limit restricts the deduction to €5,000; €1,000 remains carried forward. In year 3, this €1,000 is added to the €3,000 from the previous year: the profit before prior losses is €4,000, and the €3,000 deficit is fully offset, leaving €1,000 taxable. In year 4, no deficit remains, and the profit of €5,500 is taxable.

These profiles are fictitious. The figures illustrate the calculation and do not predict your situation.

LMNP deficit: what changes depending on your case

• Your status. A professional lessor is not subject to the same allocation rule.
• Your diet. Under the micro-BIC regime, expenses are not deductible.
• The level of your rents in relation to your expenses and your depreciation. The depreciation ceiling depends on both.
• Duration. The allocation covers the year of the deficit and the following ten years.
• A transfer. Capital gains on furnished rental properties (LMNP) are subject to the same rules as for individuals. For sales completed from February 15, 2025 onwards, the tax authorities' FAQ indicates that depreciation deducted during the rental period is subtracted from the initial purchase price. This point is addressed on a separate page.
• Your tax residence. For a non-resident landlord, the rule depends on your situation, which should be checked before deciding.

The rule depends on your situation. No results are guaranteed.