Everything you need to know about joining an Approved Management Organization (OGA, CGA or AGA in LMNP)
The LNon-Professional Furnished Rental (LMNP) has become an increasingly popular option for owners, investors and renters, especially in large and medium-sized cities.
Joining an Approved Management Organization (OGA) is an important step for furnished rental companies who want to simplify the management of their taxation and accounting. In addition to offering personalized support, it allows you to take advantage of various tax advantages while remaining in compliance with administrative obligations. In this article, we will discover how joining an OGA can make rental management more peaceful and optimize your income.
Definition and role of an Approved Management Organization (OGA)
One Approved Management Organization (OGA) is a key structure in the field of non-professional furnished rentals (LMNP). There are two types of center, it can be an Approved Management Center (CGA), or an Association (AGA, generally adapted to BNC activities). An OGA is specifically intended for certain categories of businesses, in particular according to their turnover. OGAs are essential for furnished renters looking to optimize their fiscal and accounting management.
The main role of an OGA is to verify and validate the accounting production of the companies affiliated to it. This validation is essential because it concerns tax documents and declarations submitted to tax services. By joining a CGA, a furnished rental company therefore benefits from double insurance: that of well-kept accounts that comply with fiscal requirements, and that of recognition by an approved organization.
The mission of an OGA is not limited only to auditing accounts. These centers such as the CGAs also offer other services that are very useful to LMNPs, such as tax and accounting advice, training and regular information on legislative and regulatory developments.
Differences between OGA, CGA, and AGA for LMNPs
OGAs include Approved Management Centers (CGAs) and Approved Management Associations (AGAs), which share the same objective: to support taxpayers in their fiscal and accounting management. However, their scope of action varies according to the type of activity carried out.
The choice of organization therefore depends on the nature of your activity:
- AGM membership : reserved for liberal professions (translators, lawyers, trainers, trainers, trainers, nurses, nurses, nurses, medical professions, architects...), provided they are subject to the Non-Commercial Profits (BNC) tax regime and subject to income tax.
- Membership to a CGA :One approved management center is an organization whose purpose is to provide industrial, commercial, craft and agricultural enterprises with technical assistance in terms of management/prevention of the economic and financial difficulties of their members, tax assistance and prevention and training.
For the liberal professions, this role belongs to approved associations (AGA).
Changing OGA membership dates: What you need to know
Since June 4, 2024, the Directorate General of Public Finances (DGFIP) has expanded the possibilities of joining an Approved Management Organization (OGA) including CGAs and AGAs. Now, membership can be done at any time during the fiscal year, without the constraints of the first five months of the year.
In practice, if your fiscal year ends on December 31, 2024, you can join until that date and thus benefit from tax advantages for the current year.
Information to be sent upon receipt:
Once your membership has been paid and as soon as you receive your membership number, it is essential to send it to your accountant, chartered accountant or accounting solution. This number is essential for the transmission by EDI of the tax package to the CGA during the reporting period.
Benefits of joining an OGA for LMNPs
Joining an OGA or CGA offers several significant advantages for non-professional furnished renters (LMNP). These advantages are particularly relevant in the context of fiscal and accounting management, bringing significant added value to the furnished rental business.
Tax savings and tax cuts
Joining an Approved Management Organization (OGA) offers a major tax advantage: a tax reduction of up to €915 per year, generally corresponding to 2/3 of the subscription fees. This benefit makes membership particularly attractive for non-professional furnished renters (LMNPs), as it significantly reduces the net cost of membership and associated accounting services.
Access to professional advice and audits
In addition to tax benefits, joining an OGA also offers access to professional advice and audits. These services are a great help for LMNPs, especially for those who are relatively new to the field of rental investment or who want to deepen their tax and accounting knowledge. An OGA produces regular accounting audits and advice tailored to the specific needs of each member. This professional support guarantees tax compliance and optimizes the financial management of the LMNP business.
Where to report the tax reduction?
To benefit from the tax reduction, enter two-thirds of your accounting and membership fees for an approved management organization in box 7FF of form 2042 C PRO.
This form, made available by the tax authorities, is used to declare non-wage income. It can be downloaded from the tax website or available in your personal space for online declarations.
Here's how to fill in box 7FF:
- Calculate two-thirds of your accounting and membership fees for an approved organization
- Enter this amount in box 7FF.
- Respect the ceiling of €915: if the calculated amount exceeds this threshold, enter €915. For lower fees, simply report the calculated amount.
Finally, in line 7FG, indicate the number of farms affected by this tax reduction.
OGA post-tax reform 2021: is it still interesting for LMNPs?
Impact of fiscal reforms
With the removal of the 25% increase for non-members of a CGA (which came into force gradually and completely abolished in 2023), the direct fiscal interest linked to membership has disappeared. However, joining a CGA may still be relevant depending on the taxpayer's situation. (Type of activity carried out, Taxpayer accounting skills, Exposure to tax audit risk)
Reasons to maintain membership
Despite fiscal developments, joining an OGA remains beneficial for LMNPs. In addition to the tax advantage, an OGA offers accounting security with regular audits, professional advice, and a well-defined legal framework. Owners thus optimize their tax management and avoid accounting errors that could be costly. The OGA therefore remains an effective solution to reduce the tax burden and benefit from long-term support.
Criteria and process for joining an OGA
Joining an OGA is an important step for non-professional furnished rental companies (LMNP) wishing to optimize their fiscal and accounting management. For this membership to be valid and effective, it is essential to understand the eligibility criteria and to follow the membership process correctly.
Who can join an OGA: the eligibility conditions for LMNPs?
To be eligible for the tax reduction associated with joining an OGA, a furnished rental company must meet certain conditions.
- If the acquisition of the property for furnished rental is direct, that is to say outside the company and without joint ownership.
- If the income from furnished rentals by the entire tax household is less than €23,000 per year, or if the revenue from furnished rentals is less than the other income from the fiscal household
- If he is not registered in the Trade and Companies Register as a professional renter
Do you want to know if you are eligible for the OGA? Contact our experts!
Detailed steps to join an OGA
The process of joining an OGA should be done carefully to ensure the validity of the membership. It is important to note that membership must be completed within the first five months following the start date of the rental business and before the end of the accounting year. So the other steps to join an OGA are simple and quick:
- Select the Approved Management Center adapted to its activity and its geographical location (we recommend OGI-France)
- Complete a membership application form with all the necessary information
- Provide the supporting documents required to enable eligibility to be validated
- Sign the CGA commitment documents
- Pay the membership fees as well as the annual membership fee
Documentation and formalities required
Several documents are requested in the application form for membership of a CGA:
- Company KBis or official activity document for LMNP renters
- Latest balance sheet and income statement available
- Copy of the latest corporate tax or income tax return
- Any other document deemed necessary to justify compliance with the legal eligibility conditions
Understand the obligations and responsibilities when joining an OGA
Joining an OGA involves certain obligations and responsibilities for non-professional furnished renters (LMNP). These commitments are essential to ensure fiscal and accounting compliance and to take full advantage of the services offered by the OGA.
Commitments and duties of members of an OGA
By becoming a member of an OGA, LMNP rental companies undertake to respect the rules and procedures of the organization. Previously, for a start of activity on January 5, membership in the OGA had to be made before May 31 of the same year, i.e. in the first 5 months after the start date of activity as a furnished rental company and before the end date of the financial year in question.
Now, you can join an Approved Management Organization (OGA) at any time during the fiscal year, without being restricted to the first five months of the year as before.
In addition, by joining an OGA, the professional furnished rental company undertakes to:
- Provide the elements necessary for maintaining transparent and compliant accounts
- Let the OGA carry out all useful checks to verify the accuracy of its accounting
- Respect the legal obligations and recommendations of the Management Center
- Pay your OGA membership fee every year
Tax and accounting implications
The fiscal and accounting implications of joining an OGA are significant. Members benefit from a tax reduction. However, they must also ensure that their tax returns and accounting comply with the required standards, which involves rigorous bookkeeping and accurate reporting of rental income.
Management and follow-up of files
Managing and following up on files are key aspects of joining an OGA. LMNP renters must maintain complete and up-to-date documentation regarding their furnished rental activities. This includes rental agreements, invoices, bank statements, and all other relevant documentation. Good case management facilitates verification and audit by the OGA and ensures greater transparency and efficiency in fiscal and accounting management.
Analysis of costs and fees for joining an OGA for LMNPs
Assessing the costs and fees of joining an OGA is a decisive element for non-professional furnished rental companies (LMNP) when considering joining such an organization. This analysis makes it possible to understand the price structure of OGAs and to compare the costs with the potential benefits of membership.
OGA fee structure for LMNPs
The OGA fee structure varies from organization to organization, but it generally includes a first year of membership at a discounted rate. It is important for LMNPs to find out about the specific pricing structure of each OGA in order to choose the one that offers the best value for money according to their specific needs.
Comparing the costs and benefits of membership
When evaluating OGA membership, it is essential to compare costs with potential benefits. These benefits include tax savings, access to potential professional advice and audits, and increased tax compliance. In addition, OGAs often offer additional services such as training, information on legislative and fiscal developments, and a network of professional contacts. LMNPs need to weigh these benefits against the costs of membership to determine if the investment is worth it.
Do you want to know if you are eligible for the OGA? Contact our experts!
The potential disadvantages of an OGA for LMNPs
While joining an OGA has many benefits for non-professional furnished renters (LMNPs), there are also some potential disadvantages to consider. These limitations and constraints can influence the decision to join an OGA.
Limitations and constraints
OGAs, while useful for fiscal and accounting management, can impose certain limitations and constraints on LMNPs. For example, members must comply with specific rules and procedures established by the OGA, which can sometimes limit flexibility in managing their business. Additionally, joining an OGA may result in additional costs, including annual membership fees and possibly fees for specific services. These costs must be taken into account in the analysis of the net profitability of the furnished rental business.
Cases where membership may be less beneficial
There are some situations where joining an OGA may be less beneficial for LMNPs. For example, for renters who have an already well-established and efficient fiscal and accounting structure, the services of an OGA may not provide significant added value. Likewise, for owners with low rental income or for those with a very limited volume of activity, the costs of joining the OGA may not be justified in relation to the benefits obtained. It is important for each LMNP to consider its specific situation, including the location of the property, the management method (direct or delegated), and net profitability, before deciding to join an OGA.
Selecting the right OGA for your LMNP situation
Choosing the right OGA is an important decision for non-professional furnished renters (LMNP). It is essential to select an OGA that best meets your specific needs and that can offer you the services and support that are tailored to your situation.
Criteria for choosing an OGA
When selecting an OGA, several criteria should be taken into account.
The first criterion is the specialization of the OGA in furnished rentals and its knowledge of the specificities of the LMNP status. It is also important to consider the geographical location of the OGA and its accessibility. Another essential criterion is the quality of the services offered, especially in terms of tax advice, accounting auditing, and support in case management. The reputation and opinions of other rental companies on OGA can also be valuable indicators for evaluating the quality of the services offered. Finally, the membership costs and the pricing structure must be aligned with your budget and the profitability of your furnished rental business.
Numerous OGAs spread throughout France offer specialized services to support professional furnished renters.
At Qlower, we work well with OGI-France. Discover our offer!
Important: Change in the dates for subscribing to an OGA
Since June 4, 2024, the Directorate-General for Public Finances (DGFIP) has made significant changes. From now on, membership in an Approved Management Organization (OGA) can be done at any time during the fiscal year, without being restricted to the first five months of the year as was the case before.
This means you can join an OGA at any time during your fiscal year. For example, if your fiscal year ends on December 31, 2024, you can join until that date and take advantage of tax benefits for the year 2024.
Are you on a real diet and do you have questions about joining an OGA? Our experts are here to help!
FAQS
What is an OGA and what is it for an LMNP?
An Approved Management Organization (OGA) helps non-professional furnished renters (LMNP) to benefit from tax and accounting advice, while benefiting from tax reductions (2/3 of accounting fees) on their rental income under the real regime.
What are the tax benefits of joining an OGA?
Joining an OGA allows:
1) a 2/3 tax reduction in accounting costs
2) Offer a visa and third party control of the tax return
3) Allows you to limit and reduce fiscal controls
Does the 2021 tax reform affect the interests of an OGA?
Despite the 2021 reform, joining an OGA remains relevant to optimize the management of LMNP rental income, benefit from a tax reduction at the IR and to have control of your tax declaration by a trusted third party
Who can join an OGA?
Any LMNP furnished rental company (excluding joint ownership) under the simplified real regime can join an OGA to benefit from tax advantages and accounting support.
What are the obligations when joining an OGA?
Members must provide rigorous accounting, respect fiscal deadlines and comply with the recommendations of the OGA in terms of accounting management.
How much does it cost to join an OGA?
The cost varies according to the OGA, but it is often offset by the reduction in taxes of two thirds in accounting fees. A comparison between costs and benefits is recommended.
What are the steps to join an OGA?
Membership involves choosing an OGA, completing a registration form, and providing tax documents. It is recommended to do this before the first tax returns under the real regime.
What are the alternatives to OGA for LMNPs?
In addition to OGAs, CGAs (Approved Management Centers) and AGAs (Approved Management Associations) are options for traders and liberal professions, but LMNPs are mainly concerned with OGAs.
