LMNP: micro-BIC or actual, depreciation and reintegration into capital gains in 2026

Non-professional furnished rental owners (LMNP) choose between two tax regimes. The micro-BIC regime applies a flat-rate allowance of 50% on long-term furnished rental income. The actual expenses regime allows for the deduction of actual expenses and the depreciation of the property and furnishings. For sales completed on or after February 15, 2025, depreciation deducted under the actual expenses regime is added back into the capital gains calculation, except for certain properties located in serviced residences. Rental income is subject to 18.6% in social security contributions, compared to 17.2% for capital gains on real estate.

This page covers the choice of tax regime, depreciation, and capital gains on sale. It does not detail the status of professional lessor.

LMNP or LMP: the criterion

Furnished rental involves providing a dwelling equipped with the necessary furniture for normal occupancy. The income from this rental falls under the category of industrial and commercial profits (BIC).

The landlord is considered a professional (LMP) if the annual revenue of the entire tax household exceeds €23,000 (including VAT) and exceeds the household's other earned income. Otherwise, they are considered a non-professional (LMNP).

Two points complete this criterion:

• Social security contributions. If annual revenue is less than or equal to €23,000, furnished rentals fall under the category of private asset management and are not subject to social security contributions. Only social levies remain due. The €23,000 threshold does not apply to bed and breakfasts.
• VAT. Furnished residential rentals are exempt from VAT. Hotel accommodation is taxable: the BOFiP (French Official Tax Bulletin) requires that guests have access to at least three of the four ancillary services (breakfast, cleaning, linens, reception), subject to a minimum length of stay. These conditions are not detailed here.

The micro-BIC: thresholds and allowances

The current allowances have been in effect since January 1, 2025 (law of November 19, 2024, known as the Le Meur law).

The standard allowance represents expenses and has a minimum of €305. For income received from 2026 onwards, all furnished rental activities fall under the threshold of €83,600, while unclassified tourist accommodations fall under the threshold of €15,000.

The actual expense method: actual costs and depreciation

The option for the actual expense method is automatically renewed each year. Taxable income is calculated by deducting actual expenses and charges. Depreciation of the purchase price of the property and furniture is deductible.

This page does not detail the calculation of depreciation (durations, breakdown by components).

The deficit of a furnished rental property

A deficit from a non-professional furnished rental is not deductible from overall income. It is deductible from the income of that activity in the current year and the following ten years. A deficit from a professional landlord (LMP), however, is deductible from overall income.

Upon sale: capital gains and the reinstatement of depreciation

For furnished rental properties (LMNP), capital gains are taxed as if the property were rented unfurnished. The rules for individuals apply: income tax (19.%), social security contributions (17.2%), and allowances based on the holding period. The allowance only begins after the 5th year. Income tax: 6.% per year from the 6th to the 21st year, then 4.% at the end of the 22nd year. Social security contributions: 1.65.% per year from the 6th to the 21st year, 1.60.% in the 22nd year, then 9.% per year beyond the 22nd year. Capital gains are exempt from income tax after 22 years of ownership and from social security contributions after 30 years. The duration is calculated in twelve-month periods from the date of acquisition.

The 2025 change: for disposals carried out from February 15, 2025, onwards, depreciation deducted under the actual expense method will be reinstated (2025 Finance Law). Both official sources state it as follows:

• impots.gouv.fr: depreciation deducted from rents "will now be reintegrated for the calculation of capital gains", "before allowance for holding period".
• service-public.gouv.fr: the depreciation that you were able to deduct "is reintegrated into the purchase price, under certain conditions".

These pages do not elaborate on the mechanism beyond these terms; neither does this page.

Three points to clarify:

• Date of rental. A ministerial response dated March 24, 2026 indicates that the rule applies to transfers from the day after the promulgation of the law, regardless of the date the property was put up for rent.
• Doctrine to come. The same response indicates that the details will be included in the BOFiP (Official Bulletin of Public Finances). The detailed calculation methods should be verified at the time of sale.
• Exception. Certain properties located in serviced residences (student residences, senior residences, and residences for people with disabilities) are not subject to reintegration. The specific conditions for this are not detailed here.

Non-professional lessors cannot benefit from the exemption on professional capital gains under article 151 septies of the French General Tax Code (CGI).

Social security contributions on rents

Rents from furnished non-professional rentals are subject to 18.6% of social security contributions: CSG of 10.6%, CRDS of 0.5%, and solidarity levy of 7.5%. These contributions are applied to net income after allowance (micro-BIC) or after deduction of expenses (actual income).

The 2026 Social Security Financing Act increased the CSG (General Social Contribution) from 9.2% to 10.6% on investment income (income from 2025 declared in 2026, according to the 2026 Income Tax Guide). Unfurnished rental income, property income, and capital gains on real estate remain at 17.2%.

Numerical example (fictitious profile)

Situation. Sophie and Marc, French tax residents, buy a furnished one-bedroom apartment for €150,000 and rent it out long-term, generating €12,000 in annual rent. Assumptions in this hypothetical scenario: €3,000 in actual expenses per year, €5,000 in depreciation per year, a marginal tax rate of 30%, and a resale price of €170,000 after 10 years. Acquisition costs and renovation expenses are not included.

Issue. Micro-BIC or actual, taking into account the sale?

Strategy. Compare, over ten years, income tax and social security contributions on rental income, then capital gains tax. Hypothetical scenario assumptions: under the micro-BIC regime, no depreciation is deducted, and the capital gain is calculated without adding it back. Under the actual scenario, the example assumes a capital gain increased by the €50,000 depreciated over ten years, before any allowance. This interpretation is a calculation hypothesis, not a published rule. Constant rates over ten years: 18.6% of social security contributions on rental income, 19% of social security contributions on rental income, and 17.2% of social security contributions on capital gains. After 10 years of ownership, the allowance is 30% of income tax and 8.25% of social security contributions.

Result.

In this scenario, the actual expense method saves €972 per year, or €9,720 over ten years. Using the chosen calculation method, the reinstatement adds €14,540.50 to the sale price. Overall, the actual expense method costs €4,820.50 more than the micro-BIC method. The remaining balance depends on each individual factor. In this example, the capital gain after income tax deduction remains below €50,000: the tax on high capital gains does not apply.

These profiles are fictitious. The calculation ignores the deductible portion of the CSG (General Social Contribution) and any potential social security contributions. It applies the reintegration method described above as an assumption. The figures illustrate the calculation and do not reflect your specific situation.

What changes depending on your situation

• The amount of your revenue and that of other household income from employment.
• The type of rental : long-term stay, furnished classified accommodation, furnished tourist accommodation not classified.
• The chosen diet, because the reintegration targets depreciation deducted on an actual basis.
• The length of detention at the date of the act.
• The nature of the residence Some properties located in serviced residences (student, senior, or disabled) are not subject to reintegration. Conditions must be verified for your property.
• Your tax residence. For a non-resident landlord, the rule depends on your situation, which should be checked before deciding.

No results are promised.