FURNISHED-RENTAL INVESTING scheme

build property assets while enjoying tax benefits

Furnished-rental

Status

Furnished-rental status, whether it’s professional (LMP, Loueur meublé professionnel) or non-professional) LMNP (Loueur meublé non-professionnel) is a real estate investment scheme that allows you to benefit from tax advantages when purchasing a new property.

 

Under certain conditions, you can reclaim VAT (20%) on the purchase price of the property and furnishings.

 

Year-round or seasonal rental will also generate tax-free rental income.

Who is eligible to invest

for LMNP or LMP?

  • As a non-resident, you are eligible for non-professional or professional furnished rental, as long as you are the owner of a French property which is registered with the tax office as a rental business.

The

benefits

  • VAT is recovered at a rate of 20% on the purchase price of the property and furnishings when you buy a property to rent as a hotel, student residence, holiday village or seniors' residence.

Example of investment:

Purchase value of the bare apartment with parking and annexes

€350,000 incl. VAT

Furniture and equipment

€35,000 incl. VAT

Total investment including VAT

€385,000 incl. VAT

Amount of 20% VAT reclaimed

€64,167

This represents a total investment of

€320,833 excl. VAT

  • The tax system is more advantageous than renting bare:
    - Tax allowance of 50% on rental income under the micro-BIC system
    - Depreciation of the value of the land, the property and the deed costs (25 to 40 years) years and of the furniture (5 to 10 years) under the actual system.

  • Rental yields are generally higher (year-round or seasonal)

  • In the event of resale, depreciation is not taken into account when calculating capital gains. In addition, the capital gains tax for private individuals applies.

  • Have a Siret number (registration with the Trade and Companies Register)

  • Rent the property furnished and equipped with hotel services

  • Rent the property for 20 years (if you wish to stop renting, you will have to pay the VAT received on a pro rata basis)

Conditions

for reclaiming VAT

What is the difference between LMNP ( Renting Furnished Non-Professional Property)

and LMP ( Renting Furnished Professional Property)?

Non-Professional Furnished Rental Professional furnished rental
Rental income/year
€23,000 incl. VAT
> €23,000 incl. VAT
Taxation
Micro-bic
Simplified reality
BIC income tax
Corporation tax
Micro enterprise
Deductions
BIC status:
- Flat-rate allowance of 50% of the amount of rent received, including VAT
Actual system:
- Depreciation of the value of the property
- Deduction of rental expenses relating to the business.
- Company formation and notary fees
- Property management, repair and maintenance costs
- Local tax
- Depreciation of the value of the property (20 to 40 years) and furniture (5 to 10 years), at an annual rate of between 10% and 20%.

Let's talk about your project!

Need more information?

Let's talk about your project!

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