Investment in rental property allows you to generate additional revenue. In large cities where the rental market is tight, such as Paris and many municipalities in Ile de France, it makes sense to opt for furnished accommodation.
It remains the question to know whether you are under the status of LMNP or LMP.
Renting furnished can be a really attractive investment and an interesting way of both generating an additional income and optimizing one’s tax pressure. However, this status is not as simple as you might think.
As tax options are multiple and so are the administrative procedures, furnished rental business is not an easy way. Yet, when it comes to developing your wealth, it can be a very useful tool when well mastered.
| LMNP | LMP | |
| Status | Tax system that allows any French taxpayer to take advantage of tax cuts for the purchase of new or old real estate, in order to rent it out as furnished accommodation. | |
| Conditions of application of the status relative to rented property | The rented accommodation can be either: – A furnished property rented annually – Part of the landlord’s home – Accommodation constituting a seasonal rental | |
| Conditions for applying the income statute | – The total rental income is less than 23000€ TTC per year | – The total rental income is more than 23000€ TTC per year + your rental income should be higher than the other income of the household. |
| – The revenues to be taken into account correspond to the total of the annual rents including charges, plus, if applicable, the insurance indemnities intended to guarantee the rents in case of “default” of the tenant. | ||
| – The accommodation purchased is decent and is rented furnished in accordance with the decree of July 31, 2015: the future tenant must move in by bringing only his personal effects. | ||
| – Not registered to the “registre du commerce et des société” (RCS) | – Registered to the “registre du commerce et des société” (RCS) issued by “centre de formalités des entreprises (CFE) ” | |