LMNP in Paris: the complete tax guide for investors

The LMNP status (Loueur Meuble Non Professionnel, or Non-Professional Furnished Landlord) is the most advantageous tax regime accessible to a Parisian rental investor in 2026. Under the actual expenses regime, it allows you to depreciate the property and furniture for accounting purposes, often reducing tax on rental income to zero for 15 to 20 years. For a furnished T2 in the 11th arrondissement rented at 1,150 euros/month, that means 3,000 to 5,000 euros saved in taxes each year compared to an unfurnished rental at the same rent.

After 15 years of advising investors and more than 1,200 transactions, I observe that LMNP remains poorly understood, even by experienced investors. The details matter: eligibility conditions, the choice between micro-BIC and actual expenses, depreciation calculation, recent reforms, resale pitfalls. This guide lays everything out clearly. It does not replace an accountant, but it gives you the tools to ask the right questions.

LMNP in 30 seconds

The principle is simple. You buy an apartment, furnish it according to legal criteria, and rent it out. The rental income received falls under BIC (Benefices Industriels et Commerciaux, or Industrial and Commercial Profits), not property income. This classification changes everything from a tax perspective because it opens access to accounting depreciation, a mechanism that allows you to deduct a fraction of the property and furniture value each year, just as a business would with its assets.

The result: even with comfortable rental income, the taxable result can be nil or near-nil for many years. You collect rent, you pay little or no tax on it. Legally.

It is the preferred regime for the Parisian rental investor for a simple reason: in Paris, furnished rents are 15 to 25% higher than unfurnished rents, and depreciation under the actual expenses regime cancels out nearly all taxation. The best of both worlds, provided the structure is set up correctly.

Conditions for LMNP status

LMNP status is not automatic. Three conditions must be met simultaneously.

The income threshold

Your annual furnished rental income must be below 23,000 euros (including tax). For a Parisian studio or T2 rented between 800 and 1,400 euros/month, you stay well below this threshold with a single property. Be careful if you own multiple furnished rentals: the income is cumulative.

The income proportion

Furnished rental income must represent less than 50% of your total household income (employment income, pensions, investment income, rental income). An employee earning 50,000 euros gross per year who collects 15,000 euros in furnished rental income meets this criterion. A retiree receiving 18,000 euros in pension and 20,000 euros in furnished rental income does not: they would be reclassified as LMP (Loueur Meuble Professionnel, or Professional Furnished Landlord), with different tax and social implications.

Court registry registration

You must register as LMNP with the commercial court registry at your place of residence within 15 days of starting the activity (first rental). This is the P0i form, now available online through the single business formalities portal. You will receive a SIRET number, even as a private individual.

Furnished according to the law

The property must meet the list of mandatory equipment set by the decree of July 31, 2015. This is not a suggestion: a property that does not comply with this list can have its lease reclassified as unfurnished, with all the tax consequences that implies.

The list includes: bedding with duvet or blanket, blinds or curtains in the bedrooms, cooking hobs, oven or microwave, refrigerator with freezer compartment (or separate freezer), sufficient dishes and kitchen utensils, table and chairs, lighting, storage shelving, household cleaning equipment.

In practice, for a quality Parisian furnished rental that rents quickly, you need to go well beyond the legal minimum: washing machine, dishwasher if the kitchen allows, internet connection, quality bedding, sufficient storage. Budget 5,000 to 10,000 euros for furniture and equipment for a T2, depending on the level of finish.

Micro-BIC vs actual expenses regime: the decisive choice

This is THE tax decision that determines your investment’s profitability. And in Paris, in the vast majority of cases, the answer is clear.

Micro-BIC

The default regime if your income is below 77,700 euros/year. A flat-rate deduction of 50% is applied to gross income: you are taxed on the remaining 50%, at the income tax rate plus social contributions (17.2%).

For rent of 1,150 euros/month (13,800 euros/year), the taxable income is 6,900 euros. For an investor at the 30% marginal tax rate, the total tax (income tax + social contributions) amounts to approximately 3,258 euros per year.

Simple, no bookkeeping, no accountant. But rarely optimal.

Note on the 2024 reform: for furnished tourist rentals in high-demand zones (which includes Paris), the micro-BIC deduction has been reduced to 30% with an income ceiling of 15,000 euros. This change does not affect standard long-term furnished rentals, which retain the 50% deduction. But it has significantly reduced the appeal of micro-BIC for Parisian short-term rentals.

The simplified actual expenses regime

The actual expenses regime allows you to deduct real charges AND depreciate the property and furniture. It is a powerful accounting mechanism that, in the vast majority of Parisian cases, results in zero taxable income, meaning zero tax on rental income.

Deductible charges include: loan interest, non-recoverable co-ownership charges, property tax, landlord insurance (PNO), management and accounting fees, maintenance and repair work, rental agency fees, and notary fees (spread over 3 years or deducted in the first year).

Depreciation is added on top of these charges and constitutes the real game changer of LMNP under the actual expenses regime.

Why the actual expenses regime wins in Paris

Let us run the comparative calculation on a typical Parisian T2.

Simulation: Micro-BIC vs Actual Expenses, furnished T2 in the 11th arrondissement

Property details:

• Purchase price: 330,000 euros
• Notary fees: 26,400 euros
• Furniture: 8,000 euros
• Loan: 330,000 euros over 20 years at 3.5%
• Furnished rent (excluding charges): 1,150 euros/month
• Annual income: 13,800 euros

Micro-BIC option:

• 50% deduction: 6,900 euros
• Taxable income: 6,900 euros
• Tax (30% marginal rate): 2,070 euros
• Social contributions (17.2%): 1,187 euros
• Total annual tax: 3,257 euros

Simplified actual expenses option:

• Income: 13,800 euros
• Deductible charges:
  • Loan interest (year 1): approximately 11,100 euros
  • Non-recoverable co-ownership charges: 960 euros
  • Property tax: 1,200 euros
  • Landlord insurance (PNO): 220 euros
  • Accountant: 650 euros
  • Total charges: 14,130 euros
• Result before depreciation: 13,800 - 14,130 = -330 euros (deficit)
• Depreciation available but unused this year (the deficit is sufficient)
• Depreciation is carried forward for subsequent years when interest payments decrease
• Total annual tax: 0 euros

Year 8 (reduced loan interest):

• Income: 14,500 euros (indexed)
• Deductible charges excluding depreciation: 10,200 euros (lower interest)
• Result before depreciation: 4,300 euros
• Building depreciation (80% of 330,000 over 30 years): 8,800 euros/year
• Furniture depreciation (8,000 over 7 years): completed
• Depreciation used: 4,300 euros (depreciation cannot create a deficit)
• Taxable result: 0 euros
• Total annual tax: 0 euros

The annual saving exceeds 3,000 euros in favor of the actual expenses regime from the very first year, and continues throughout the depreciation period, typically 15 to 20 years or more if the stock of deferred depreciation is large.

The cost of this optimization: a specialized LMNP accountant, between 500 and 800 euros/year (deductible). The return on investment is immediate and substantial.

Depreciation: the mechanism that changes everything

Depreciation is at the heart of the LMNP advantage. Let us detail how it works.

The principle

Depreciating a property means recording its theoretical loss of value due to wear and tear for accounting purposes. The tax authorities allow this deduction even if the property is appreciating in the market, and this is the paradox that makes LMNP so attractive. You deduct a charge that does not exist economically.

Component-based breakdown

The property is not depreciated as a single block. The accountant breaks the property down into components, each with its own depreciation period:

Land is not depreciable. It is generally estimated at 15 to 25% of the total value in Paris (20% is a common convention, though it can be higher in central arrondissements).

Structural work (framework, load-bearing walls) represents approximately 40 to 50% of the value excluding land and is depreciated over 40 to 50 years.

Roofing represents 5 to 10% and is depreciated over 25 years.

Electrical and plumbing installations represent 10 to 15% and are depreciated over 20 to 25 years.

Fittings and finishes (fitted kitchen, bathroom, coverings) represent 15 to 20% and are depreciated over 15 years.

Furniture is depreciated separately over 5 to 10 years depending on the items (appliances 5 years, furniture 7 to 10 years).

How much does it represent in practice

For a T2 purchased for 330,000 euros in Paris, with 20% non-depreciable land, the depreciable base is 264,000 euros. The annual depreciation charge, using component breakdown, typically falls between 8,000 and 11,000 euros/year, depending on the allocation determined by your accountant.

This amount is deducted from the taxable result, after real charges. And if the annual depreciation exceeds the result before depreciation, the surplus is carried forward without time limit. It does not create a deficit chargeable against other income (unlike standard charges) but it is stored for future years.

The golden rule of LMNP depreciation

Depreciation cannot create or increase a BIC deficit. It can only bring the result to zero. If your result before depreciation is 4,000 euros and your depreciation charge is 9,000 euros, you deduct only 4,000 euros. The remaining 5,000 euros is carried forward to subsequent years, indefinitely. It is this stock of deferred depreciation that extends the tax advantage well beyond the early years of high loan interest.

Notary fees: immediate deduction or spreading

At purchase, notary fees (approximately 8% for resale properties in Paris) can be treated in two ways under the actual expenses regime.

Deduction as charges in the first year. You deduct the full acquisition costs (transfer duties, notary fees, miscellaneous expenses) in the year of purchase. Advantage: a significant BIC deficit in the first year, absorbing all rental income and creating a stock of carry-forward deficit. Disadvantage: you “consume” a major tax benefit in a single year.

Integration into the purchase price and depreciation. The fees are added to the depreciable value of the property and depreciated over the same period. Advantage: the annual depreciation is slightly higher throughout the period. Disadvantage: the benefit is diluted over 25 to 30 years.

The optimal choice depends on your overall tax situation. In most cases, immediate deduction is preferable as it maximizes the tax benefit in the early years when loan interest is also highest. But this is a decision to validate with your accountant.

LMNP vs LMP: where is the boundary?

If your furnished rental income exceeds 23,000 euros/year AND represents more than 50% of your total household income, you automatically shift to LMP (Professional Furnished Landlord). This is a significantly different status.

What changes under LMP

Social contributions. Under LMP, you are affiliated with the self-employed social security system and pay social contributions on your profits (approximately 35 to 45% of the result). Under LMNP, you only pay social levies of 17.2%. The difference is considerable.

Deficit allocation. Under LMP, deficits are chargeable against total income without limitation, which is more advantageous than LMNP where they only offset BIC income of the same type. But this advantage is largely offset by social contributions.

Capital gains on resale. Under LMP, if the activity has been carried on for more than 5 years and income over the previous two years is below 90,000 euros, the capital gain can be fully exempt. Under LMNP, the individuals’ capital gains regime applies (allowances for holding period, full income tax exemption after 22 years, full social levies exemption after 30 years).

IFI (wealth tax). LMP properties are exempt from IFI if rental income exceeds other professional income. Under LMNP, properties are included in the IFI base.

The typical Paris scenario

For a salaried investor who owns one or two Parisian furnished rentals, the shift to LMP is unlikely: income stays below 23,000 euros with a single property, and employment income far exceeds rental income. The risk appears when accumulating multiple furnished rentals or when employment income drops (retirement, career change). This is a parameter to monitor over time.

Advice from Jean Mascla: LMNP is the ideal regime for one or two furnished properties in Paris when you have solid employment income. If you are considering a portfolio of three or more furnished properties, have your accountant model the LMNP/LMP scenarios before each new acquisition. An involuntary shift to LMP can prove costly in social contributions.

LMNP pitfalls to know

LMNP is not a tax haven without strings. Several points of vigilance deserve attention.

Reclassification as unfurnished rental

If the property does not meet the mandatory furniture list, the tenant can request reclassification of the lease as unfurnished before the court. Consequence: the lease switches from one year to three years, termination becomes more restrictive, and most importantly, your tax regime shifts to property income, with a potential reassessment of previous tax years. The solution is simple: furnish properly and keep a detailed inventory signed by the tenant at move-in.

Accounting consistency over time

Under the actual expenses regime, you must maintain commercial accounts (balance sheet, income statement) and file a tax return (liasse fiscale) each year. This is not something you can do alone, or at least not without a high risk of error. Using a specialized accountant is, in practice, essential. Cost: 500 to 800 euros/year, fully deductible. It is the best investment within an investment.

Capital gains on early resale

LMNP benefits from the individuals’ capital gains regime, with progressive allowances by year of ownership. But these allowances only become significant after 6 years of ownership, and full exemption only applies after 22 years (income tax) and 30 years (social levies). Selling before 6 years means facing a heavily taxed capital gain, especially if the market has risen. LMNP is a medium- to long-term investment: 10 years minimum to reap the full benefit.

Possible reforms

LMNP is regularly discussed in parliament. The 2024 reform already tightened the treatment of tourist furnished rentals. Proposals to reintegrate depreciation into the capital gains calculation have been raised (without being adopted to date). Legislative risk exists. It is low for existing stock (reforms are generally not retroactive), but it discourages basing your entire wealth strategy solely on the assumption that the current regime will continue indefinitely.

LMNP for the Parisian investor: which property profile?

Not all properties are equally suited to LMNP in Paris. Here are the most relevant profiles.

The student or young professional studio

Surface: 18 to 25 sqm. Budget: 180,000 to 280,000 euros. Target arrondissements: 5th (Quartier Latin), 6th (Odeon), 13th (BnF, universities), 14th (Cite Universitaire), 18th, 19th, 20th. Furnished rent: 700 to 1,000 euros/month. Turnover is high (9-month student lease) but demand is virtually unlimited. Gross yield: 3.5 to 4.5%.

The furnished T2 for a young professional or couple

Surface: 30 to 45 sqm. Budget: 280,000 to 420,000 euros. Target arrondissements: 9th, 10th, 11th, 12th, 14th, 17th. Furnished rent: 1,050 to 1,350 euros/month. Moderate turnover (one-year renewable lease), reliable tenant profile. This is the sweet spot of Parisian LMNP: decent yield, reasonable management, excellent appreciation potential in up-and-coming arrondissements.

The T3-T4 for furnished co-living

Surface: 55 to 80 sqm. Budget: 400,000 to 600,000 euros. Target arrondissements: 10th, 11th, 13th, 17th, 18th, 19th, 20th. Total furnished rent (3 bedrooms): 1,800 to 2,500 euros/month. Boosted gross yield (4 to 5%) but heavier management. LMNP is particularly relevant here because the high rents combined with depreciation create a massive tax advantage.

Our property hunters select properties optimized for LMNP: good energy rating, low co-ownership charges, layout suited to furnished rental, location with strong rental demand. Discuss your furnished investment project with our team.

The LMNP tax calendar

LMNP imposes an administrative and tax schedule to follow.

Before the first rental: register with the court registry (P0i form), choose the tax regime (actual expenses or micro-BIC: the actual regime must be chosen by letter to the tax office before February 1 of the applicable year, or at the time of the first filing), appoint an accountant if using the actual regime.

Each year (May): BIC income declaration (tax return 2031 and appendices) filed by your accountant, then transfer of the result to your personal income tax return (form 2042 C PRO).

During the year: maintain accounts (income, charges, invoices), keep supporting documents for a minimum of 6 years.

At resale: capital gains declaration (individuals’ regime), close the LMNP activity if this was your only furnished property.

The administrative complexity is the main barrier to LMNP, but it is entirely delegable to an accountant for a modest cost relative to the tax advantage obtained.

LMNP and rent control: compatible?

A frequent question from Parisian investors: does furnished status allow exceeding the reference rent?

The answer is nuanced. Rent control also applies to furnished rentals in Paris, with specific reference rents (generally 10 to 15% higher than unfurnished reference rents). A rent supplement for exceptional characteristics (view, terrace, premium amenities) remains possible, but it must be justified and can be challenged by the tenant.

In practice, the maximum furnished reference rent leaves sufficient margin for LMNP to remain very attractive in Paris. But you must verify the applicable rent before purchase, not after. This is an element our property hunters systematically include in the analysis of each investment property.

Key takeaways

LMNP under the actual expenses regime is, in 2026, the most advantageous tax mechanism for a rental investor in Paris. Accounting depreciation of the property and furniture reduces taxation on rental income to zero for 15 to 20 years, while collecting furnished rents that are 15 to 25% higher than unfurnished rents.

The conditions: comply with LMNP thresholds (23,000 euros and 50% of income), furnish the property properly, choose the actual expenses regime, appoint a specialized accountant, and plan for a long holding period (10 years minimum).

The numbers speak for themselves: for a typical Parisian T2, LMNP under the actual expenses regime saves 3,000 to 5,000 euros/year in tax compared to micro-BIC, and much more compared to unfurnished rental under the property income regime. Cumulated over 15 years, that is 45,000 to 75,000 euros in tax savings, more than enough to cover the fees of a property hunter and an accountant.

The choice of property is the first variable of LMNP success: a good energy rating, controlled charges, a location with strong rental demand and a negotiated purchase price. This is exactly what our property hunters have been seeking for our investor clients since 2011.

Do you have a furnished investment project in Paris? Set up your LMNP project with Home Select. Our 16 property hunters identify the properties best suited to LMNP, negotiate the purchase price and connect you with specialized accountants. First consultation free.