LMNP: Non-professional furnished landlord
Status and conditions to be met
- Rental of furnished accommodation either new-build or old
- Rental to a person or legal entity
- To qualify as a Loueur en Meublé Non Professionnel, the income from furnished property rental must be:
- Less than or equal to 23 000 € tax inclusive, this threshold is adjusted prorata, if the activity begins during the course of the year
- Less than 50% of total income.
- The investment may be made either in your own name or through a family company subject to tax on entities (SARL, EURL, SNC)
- Opt for the réel simplifié tax regime
- Make a 2013 declaration.
Income net of tax as a result of depreciationNo operating losses can be offset against income but may be carried forward (for a maximum of 5 years) against like income (non professional trading profits).
Costs that may be offset are:
- Purchase costs (notary’s costs, set-up costs,…). The deduction of these costs may be spread over a maximum of 5 years in equal fractions. They may also be deducted in a single financial year.
- Loan interest relating to the purchase
- Management costs (accountancy, legal advice, etc.)
- Impôt foncier (one of two property taxes)
- Co-ownership costs
The apartment(s) are depreciated according to the rule of deferred depreciation over a period of between 30 and 50 years.
Under the Résidence de Tourisme scheme, the base for depreciation is the purchase price ex- tax of the apartment excluding the value of the plot (12.5 %).
Furnishings are depreciated according to the rule of deferred depreciation over a period of 10 years on the basis of the ex-tax purchase price. For accounting purposes, depreciation is deducted every year. However, for tax purposes it is only deducted up to the amount of the rental after other costs have been deducted, the excess being carried forward without time limit. In no case may depreciation contribute to a loss.
When outgoings are less than income, depreciation may reduce the profit to zero with the result that no tax is payable on the rental income:
Purchase of an apartment exclusive of taxes in a Résidence de Tourisme schemeWithin a résidence de tourisme scheme, the LMNP may reclaim VAT on the purchase price (20%).
The property must be let to an operating company which sublets it furnished with para-hotelier services.
For more details, see the leaflet: La Résidence de tourisme, principe et définition (priciple and definition of the résidence de tourism)