Since 15 February 2025, the tax rules for the non-professional furnished landlord (loueur en meublé non professionnel — LMNP) have changed profoundly: for any sale completed from that date, the depreciation deducted under the actual regime is clawed back into the capital-gain calculation (article 84 of Act No. 2025-127 of 14 February 2025, codified in article 150 VB of the French General Tax Code — CGI). The measure triggered a wave of anxiety among furnished landlords, with some announcing nothing less than "the end of LMNP".
At the same time, the 2026 Finance Act raised the long-term micro-BIC threshold from €77,700 to €83,600 of gross receipts. Whether you already rent out a furnished property or are about to invest, the choice between the micro-BIC 50% flat allowance and depreciation under the actual regime deserves a fresh calculation — and the outcome is often far more favourable to the actual regime than the prevailing fear suggests.
€1,866 of income tax and social charges saved every year under the actual regime in our Dijon case study (furnished T2 at €124,000, investor taxed at 30%), against an extra capital-gains cost of about €5,235 after ten years of ownership: the depreciation clawback does not reverse the trade-off, it merely tempers it.
What this article covers
This article compares micro-BIC and the actual regime for LMNP in 2026: the new thresholds from the 2026 Finance Act, how the 50% allowance works, the mechanics of depreciation capped by article 39 C of the CGI, the depreciation clawback in the capital gain introduced in 2025, a fully worked comparison on a furnished T2 in Dijon, a decision tree and the most common mistakes.
Micro-BIC or actual regime: the legal framework for LMNP in 2026
Furnished rental income falls under industrial and commercial profits (BIC — bénéfices industriels et commerciaux), not property income. The non-professional landlord chooses between two regimes: micro-BIC under article 50-0 of the CGI, which applies a flat allowance to receipts, and the actual regime, which deducts real expenses and depreciation of the property. The 2026 Finance Act (Act No. 2026-103 of 19 February 2026) enacted a three-year revaluation of the micro thresholds for 2026-2028.
| Type of furnished rental | Receipts threshold (2026 income) | Allowance | Legal basis |
|---|---|---|---|
| Long-term furnished rental | €83,600 | 50% | art. 50-0 CGI (2026 Finance Act) |
| Classified tourist rental and guest rooms | €83,600 | 50% | art. 50-0 CGI |
| Unclassified tourist rental | €15,000 | 30% | art. 50-0 CGI, "Le Meur" Act No. 2024-1039 |
Mind the reporting lag: 2025 income, declared in spring 2026, remains subject to the old €77,700 threshold. The €83,600 threshold applies to income earned from 1 January 2026, declared in 2027 (service-public.gouv.fr, factsheet F32744, updated 15 April 2026). The €15,000 threshold for unclassified tourist rentals, introduced by the "Le Meur" Act No. 2024-1039 of 19 November 2024, is expressly excluded from the revaluation. For an overview of the other measures, see our analysis of the 2026 Finance Act for real estate.
LMNP or LMP: where is the line?
The professional furnished landlord status (LMP — loueur en meublé professionnel) applies when two cumulative conditions are met (article 155, IV of the CGI): the household's annual receipts exceed €23,000 and exceed the tax household's other earned income (salaries, BIC, non-commercial profits, farm profits, article 62 managers' pay). The LMP switches to the self-employed social security scheme (contributions of around 35% to 45% of the profit, with a minimum contribution even at a loss) and to the professional capital-gains regime — with the possible exemption of article 151 septies after five years of activity, depending on receipts. It thereby escapes the 2025 "individuals" clawback, but suffers the recapture of depreciation as a short-term professional gain.
Another threshold not to confuse: for short-term lets, social security affiliation becomes compulsory from €23,000 of annual receipts (article L. 611-1 of the French Social Security Code), even while remaining LMNP for tax purposes. And since 1 January 2026, unclassified tourist rentals have been excluded from the micro-entrepreneur (micro-social) scheme (service-public.gouv.fr, factsheet F34102).
⚠️ Warning: the CSG increase carried by the 2026 Social Security Financing Act (Act No. 2025-1403 of 30 December 2025) hits furnished rents: non-professional BIC income bears 18.6% social charges from the taxation of 2025 income onwards. Property income from unfurnished lettings and capital gains on property sales remain at 17.2%.
50% allowance or depreciation: two opposing mechanics
Micro-BIC: the simplicity of a flat allowance
Under micro-BIC, you report your gross receipts on the 2042-C-PRO return (boxes 5ND/5OD, or 5NW depending on the type of letting) and the tax authorities apply the 50% allowance for long-term rentals. No further expenses are deductible and no bookkeeping is required. The remaining half is taxed at your marginal income tax rate (TMI — the highest bracket of your scale) plus 18.6% social charges. Micro-BIC is therefore only worthwhile if your real expenses, depreciation included, stay below half of your receipts — a rare situation as soon as a loan finances the property.
The actual regime: deduct real expenses and depreciate the property
Under the actual regime, you deduct all expenses actually borne: loan interest, property tax, insurance, non-recoverable co-ownership charges, management and accounting fees — the latter fully deductible again since the approved management organisations (OGA) scheme was scrapped and the €915 tax reduction abolished from the taxation of 2025 income.
On top comes depreciation: the accounting recognition of the wear of the building (excluding land) and the furniture, spread over their normal useful life. It is what makes the actual regime powerful, but it is framed by article 39 C of the CGI: deductible depreciation is capped at the difference between the rents earned and the other expenses relating to the property. It can therefore neither create nor deepen a loss. The portion set aside is not lost: it can be carried forward without time limit and offset against later years within the same cap (BOFiP, BOI-BIC-AMT-20-40-10-10).
The trade-off: heavier obligations. Registration with the INPI one-stop shop within 15 days of starting the activity (a SIREN number is issued), the 2031-SD tax return and its 2033-A to G schedules filed electronically with the business tax office, and the result carried over to the 2042-C-PRO. The LMNP is also liable for the business property levy (CFE — cotisation foncière des entreprises), with an exemption from the minimum contribution where receipts do not exceed €5,000 (article 1647 D of the CGI, receipts assessed in year N−2) and an exemption in the year the activity starts.
The depreciation clawback since 15 February 2025: what really changes
Article 84 of the 2025 Finance Act amended article 150 VB of the CGI: for sales completed from 15 February 2025, the acquisition price used to compute the capital gain is reduced by the depreciation allowed as a deduction. The taxable gain therefore rises by the amount of depreciation booked — including amounts deducted before 2025, as confirmed by the Mette ministerial answer (written question No. 10097, JOAN of 24 March 2026).
Three important qualifications. First, depreciation of furniture is not clawed back, nor is depreciation matching works expenses already counted in the acquisition price (4° of II of article 150 VB). Second, certain serviced residences escape the measure: student and young-worker residences, senior residences (articles L. 631-12 and L. 631-13 of the French Construction and Housing Code — CCH) and care homes for the elderly or disabled such as EHPAD (article L. 312-1 of the French Social Action Code — CASF). Third — the decisive point — the individuals' capital-gains regime is fully preserved: 19% income tax and 17.2% social charges, holding-period allowances unchanged, full income tax exemption after 22 years (article 150 VC of the CGI) and social charges exemption after 30 years. The "exemption at 17 years" reform passed by the National Assembly in November 2025 was not retained in the promulgated law. For the full mechanics, see our guide to real estate capital gains in 2026.
Key takeaway: a furnished property held for more than 22 years pays no more income tax on its capital gain, clawback or not — and no social charges at all after 30 years. The longer your holding horizon, the less the 2025 reform concerns you.
Worked example: micro-BIC or actual regime for a furnished T2 in Dijon
Profile: a 45 m² T2 in Dijon bought for €124,000 (average price of €2,751/m², MeilleursAgents as at 1 July 2026), let furnished at €640 per month excluding charges, i.e. €7,680 of annual receipts, financed with a €124,000 loan over 20 years at 3.22% (average 20-year rate, Observatoire Crédit Logement/CSA, June 2026). Investor's marginal tax rate: 30%.
Year one: loan interest comes to about €3,950. Add €750 of property tax, €300 of insurance, €500 of non-recoverable co-ownership charges and €600 of accounting fees: €6,100 of deductible expenses under the actual regime. Theoretical depreciation works out at about €4,656 per year (building excluding land depreciated by component, furniture over 7 years), but article 39 C caps it at €7,680 − €6,100 = €1,580. The €3,076 balance is carried forward, without time limit.
| Line item (year 1) | Micro-BIC | Actual regime |
|---|---|---|
| Annual receipts | €7,680 | €7,680 |
| 50% flat allowance | − €3,840 | — |
| Deductible expenses | — | − €6,100 |
| Depreciation deducted (art. 39 C cap) | — | − €1,580 |
| Taxable base | €3,840 | €0 |
| Income tax (30% marginal rate) | €1,152 | €0 |
| Social charges (18.6%) | €714 | €0 |
| Total annual tax | €1,866 | €0 |
| Annual saving under the actual regime | €1,866 | |
The actual regime wipes out the tax on the rents, and the stock of carried-forward depreciation will extend that situation for years as the interest burden declines. To place this case within your own framework — gross yield, yield net of expenses, yield net of tax — our guide to calculating gross and net rental yield sets out the formulas.
And on resale? The true cost of the clawback
Scenario — sale after 10 years at €145,000 (a cautious assumption of roughly 1.6% appreciation per year), with €18,000 of building depreciation allowed as a deduction over the period — furniture, which is not clawed back, is excluded from the count.
| Line item | Before the reform | Since 15 February 2025 |
|---|---|---|
| Acquisition price used | €124,000 | €106,000 (€124,000 − €18,000) |
| Taxable capital gain | €21,000 | €39,000 |
| 19% income tax after 30% allowance (10 years, art. 150 VC) | €2,793 | €5,187 |
| 17.2% social charges after 8.25% allowance | €3,314 | €6,155 |
| Total tax on the capital gain | €6,107 | €11,342 |
| Extra cost due to the clawback | + €5,235 | |
The calculation is deliberately simplified (acquisition price used without the flat-rate uplifts that the individuals' regime otherwise allows), but the order of magnitude speaks for itself: the clawback costs €5,235 here at resale, while the actual regime saved about €1,866 of tax per year for ten years.
Ten-year balance: about €18,660 of tax avoided under the actual regime (assuming, for simplicity, a constant annual saving) against €5,235 of extra cost on sale — a net advantage of about €13,425 in favour of the actual regime, despite the reform.
Micro-BIC or actual regime: the 2026 decision tree
Choose the actual regime if:
- your real expenses plus depreciation exceed 50% of your receipts — almost always the case when a loan finances the purchase;
- your receipts exceed €83,600: the actual regime then becomes compulsory;
- you let an unclassified tourist rental: with the allowance cut to 30% and a €15,000 ceiling, micro is rarely competitive.
Micro-BIC keeps the advantage of simplicity if the property is owned without a loan, with few expenses, or if receipts are marginal. And over a very long horizon — beyond 22 years, all the more so 30 — the clawback mechanically loses its bite, as the holding-period allowances neutralise all or part of the gain.
What to check before deciding: the total of your real expenses and allowable depreciation, your marginal tax rate, your holding horizon, the nature of the letting (long-term, classified or unclassified tourist rental) and whether you cross the LMP thresholds. Choosing a tax regime does not exempt you from the landlord's energy obligations either: see the furnished landlord's EPC obligations.
The four mistakes that skew the micro-BIC or actual regime choice
Mistake No. 1 — Working with outdated thresholds
Comparing your 2026 receipts with the €77,700 ceiling would push you into the actual regime by mistake: the threshold applicable to income earned from 1 January 2026 is €83,600. Conversely, the return filed in spring 2026 covers 2025 income: there, €77,700 is indeed the right figure. The €15,000 threshold for unclassified tourist rentals does not move.
Mistake No. 2 — Burying the actual regime because of the clawback
LMNP capital gains remain taxed under the individuals' regime: 19% and 17.2% after holding-period allowances, income tax exemption at 22 years and social charges exemption at 30 years. A property held for a long time may be barely affected despite the clawback. Conversely, do not assume that only post-2025 depreciation is recaptured: all depreciation allowed as a deduction is clawed back, including earlier amounts (Mette ministerial answer of 24 March 2026).
Mistake No. 3 — Confusing the two €23,000 thresholds
Exceeding €23,000 of receipts does not make you an LMP: those receipts must also exceed the household's other earned income (cumulative conditions of article 155, IV of the CGI). By contrast, for short-term lets, the €23,000 social threshold is enough on its own to trigger affiliation to social security contributions (article L. 611-1 of the French Social Security Code).
⚠️ Warning: stop looking to join an approved management organisation (OGA). The 25% surcharge for non-membership disappeared from the taxation of 2023 income, the OGA accreditation scheme has been abolished and the €915 tax reduction for accounting fees is repealed from the taxation of 2025 income — in return, those fees are fully deductible under the actual regime.
Mistake No. 4 — Counting on the Jeanbrun status to depreciate a furnished property
The private landlord status created by the 2026 Finance Act allows a depreciation deduction against property income, but it is reserved for unfurnished lettings used as the tenant's main residence (nine-year commitment, capped rents, acquisitions and building permits between 21 February 2026 and 31 December 2028). Furnished rentals — LMNP and LMP alike — and short-term lets are excluded. If you are weighing furnished against unfurnished, compare with the Jeanbrun scheme and, on the works side, with the 2026 property deficit mechanism.
Simulate both regimes with your own figures
Mon Simulateur Immobilier rental yield simulator
Compare micro-BIC and the actual regime with your own data: the simulator combines purchase price, rent, expenses, loan and taxation (50% allowance, depreciation, marginal tax rate, 18.6% social charges) to calculate your net-of-tax yield and your annual cash flow under each regime.
To go further: the capital gains calculator to price the effect of the clawback on resale, and the property deficit simulator if you are weighing up unfurnished letting.
Conclusion
In 2026, the micro-BIC versus actual regime match comes down to a simple rule: as soon as your expenses and depreciation exceed half of your receipts, the actual regime beats the 50% allowance — and the new €83,600 threshold changes nothing there. The depreciation clawback introduced in 2025 makes the exit more expensive, but it does not undermine the individuals' capital-gains regime: holding-period allowances, exemption at 22 and 30 years. In our Dijon case, ten years under the actual regime leave a net advantage of about €13,425 despite the extra cost on resale.
Before opting, run both scenarios with your real data. The Mon Simulateur Immobilier rental yield simulator calculates your net-of-tax yield and your cash flow under micro-BIC and the actual regime alike, 18.6% social charges included.
