Complete Guide to Real LMNP in 2025

What is LMNP Réel?

Non-Professional Furnished Rental (LMNP) under the real regime is a tax option that is aimed at owners renting one or more furnished real estate properties. Unlike the micro-BIC regime, which applies a lump-sum reduction on rental income, the real regime makes it possible to effectively deduct real expenses and to depreciate the property, any work and furniture. This includes expenses related to the management of the property, loan interests, works, acquisition costs (notary and agency) as well as the depreciation of the property and equipment. These deductions, most of the time, make it possible to completely erase rental income and to avoid tax on this income for several years.

To opt for the real regime, the owner must request it from the tax services and comply with certain accounting obligations, such as maintaining detailed accounts and remotely transmitting the tax return using real estate tax professionals such as Qlower.

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Conditions and eligibility for the real LMNP regime

To opt for the real regime for non-professional furnished rentals (LMNP), it is necessary to understand the conditions and eligibility criteria that govern this tax option. Eligibility for the real regime is not automatic and requires meeting certain specific conditions:

• The owner must generate annual rental income that exceeds the micro-BIC ceiling, set at 77,700 euros in 2025 for long-term furnished rentals. For seasonal rentals, the ceiling in 2025 is €15,000 for unclassified accommodations and €187,700 for classified tourist accommodations. However, even below this threshold, the choice of the real regime remains possible and will most often prove beneficial in optimizing taxation, in particular if the actual expenses to be deducted are significant in relation to revenue.

• The option for the real regime must be expressed explicitly to the tax authorities. This process is done by filing a specific declaration, generally before May 1 of the year for which the option is requested, for application as early as the current year.

• Once under the actual regime, the LMNP owner is required to comply with specific accounting obligations. This includes maintaining detailed accounts, completing an annual balance sheet and income statement, and reporting income according to commercial accounting rules (BIC income). These requirements highlight the importance of rigorous management and may justify the use of a real estate tax specialist like Qlower.

The option for the real regime is binding for a minimum period of two years. After this period, the owner can choose to return to the micro-BIC regime or to continue under the real regime, depending on his financial and fiscal situation.

The eligibility and conditions of the real LMNP regime offer flexibility and significant tax advantages for real estate investors. However, the decision to opt for this regime must be carefully considered and adapted to the individual situation of each owner, taking into account revenues, deductible expenses, and the associated accounting and administrative obligations. Ask the Qlower experts for a simulation.

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What are the steps to opt for the simplified real regime in LMNP

To opt for the simplified real regime in LMNP, owners must first express their choice in favor of this regime to the tax services. This process is carried out by completing the activity declaration form (e.g. P0i) with the INPI for new renters or by specifying the tax option chosen. It is imperative to carry out this operation before May 1 of the year for which the option should apply. Then, it is necessary to set up accurate accounting using a tool like Qlower, to prepare an annual balance sheet and income statement, and to comply with specific reporting obligations, in particular the 2033 declaration and its annexes for industrial and commercial profits (BIC). This transition to the simplified real regime requires accounting rigor and good preparation in order to optimize taxation and take full advantage of the benefits of this regime.

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The tax advantages of real LMNP

The real LMNP (Non-Professional Furnished Rental) regime offers several significant tax advantages for real estate investors:

The first significant advantage is the possibility of deducting the real expenses related to the rental investment, such as acquisition costs (notary, agency), management and maintenance costs, condominium fees, taxes and taxes or even loan interest. This allows an initial reduction in the tax base.

Example: suppose you have invested in an apartment in real LMNP, and that you have incurred acquisition, management, maintenance and condominium fees for a total of €12,000 per year. If your annual rental income is €15,000, you can already deduct these expenses from your rental income, thus reducing your tax base to only €3,000.

Depreciation of property and furniture is another major advantage. Indeed, the real regime allows the depreciation of the building of the housing (value excluding land) and equipment over several years, thus reducing the annual taxable income.

Simplified example: let's say you bought an apartment that will be rented furnished for €200,000, and purchased furniture for €20,000. According to the depreciation rules, you can depreciate the property over a period of 50 years and the furniture over 5 years. This means that each year you can deduct €3600 (€190,000/50) for real estate and €4,000 (€20,000/5) for furniture from your taxable rental income.

These depreciation and expense deduction mechanisms offer significant fiscal optimization, which can lead to fiscal neutrality or very low taxation on rental income. This optimization, combined with the generation of additional income, makes LMNP real estate a particularly attractive real estate investment strategy.

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Understanding amortization in LMNP Real

Damping mechanism in LMNP

Real LMNP depreciation is an essential accounting mechanism that allows real estate investors to spread the cost of buying real estate (excluding land) and its furniture over their estimated lifespan. This accounting approach aims to reflect the theoretical depreciation of the asset and equipment over time, which has the effect of significantly reducing the taxable profit.

In concrete terms, this means that each year, a fraction of the cost of acquiring the property and furniture is deducted from rental income, which reduces the amount on which taxes are calculated. For example, if you bought an apartment for €200,000, you could write off this expense over a period of several years, at a rate decided by the tax specialist who accompanies you, in compliance with the amortization periods set by the tax authorities.

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Depreciation of goods and furniture

For real estate, the amortization period is generally estimated between 30 and 70 years, while for furniture and equipment, it is shorter, often between 5 and 10 years. This distinction makes it possible to accurately calculate the annual depreciation, which will then be deducted from the rental income received to reduce income tax.

At Qlower, the building (housing excluding land) is depreciated by component. The asset is “divided” into components that each have a distinct lifespan.

• The Structural Work is amortized over 50 years
• roof waterproofing is amortized over 20 years
• the technical installation is amortized over 15 years
• the layout is amortized over 5 years
  These depreciations are accumulated every year and the cumulative depreciation load therefore reduces over time, in stages.

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Impact of depreciation on taxation

Depreciation has a direct impact on the taxation of the LMNP owner. By reducing taxable rental income, amortization most often makes it possible not to pay taxes on rental income during the first years of rental activity. This specificity makes depreciation a powerful tool for fiscal optimization under LMNP Réel, thus offering better net after-tax profitability for real estate investment.

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Accounting and declarative management in LMNP Réel

Accounting requirements specific to LMNP Réel

Under the real LMNP regime, investors are subject to strict accounting requirements:

Maintaining complete and accurate accounts: Investors in LMNP Réel must maintain complete accounting. This means recording all financial transactions as soon as they are observed. It is the simplest and most used accounting method.

Establishment of an annual balance sheet and income statement: Investors must produce a balance sheet and income statement every year to report on the financial situation and performance of their furnished rental business. The balance sheet shows assets (assets owned) and liabilities (debts and equity), while the income statement summarizes the income and expenses of the past year.

Depreciation documentation: It is necessary to accurately document the amortization of real estate and furniture equipment. This includes identifying assets eligible for depreciation, calculating appropriate depreciation rates, and recording depreciated amounts annually in the accounts.

Registration of deductible expenses: All deductible expenses, such as management fees, maintenance expenses, loan interests, and condominium fees, must be recorded in detail in the accounting. It is important to keep supporting documents and accounting records for 10 years to support these records in the event of a tax audit.

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Tax reporting and pitfalls to avoid

Tax reporting under the real regime requires special attention to avoid common mistakes, such as the omission of deductible expenses or a poor valuation of depreciation and amortization. Rental income is declared on form 2033 and its annexes for BIC (Industrial and Commercial Profits). It is always your real estate tax partner, such as Qlower, who produces and transmits these complex elements to the tax authorities. Using a real estate tax specialist is recommended to effectively navigate these complex administrative and accounting procedures.

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Deduction of expenses and fiscal optimization

Lack of an exhaustive list of deductible expenses

In LMNP Réel, all expenses incurred for the rental activity of the accommodation are deductible. There is therefore no exhaustive list of these deductible expenses. These expenses include, among others, acquisition costs, management fees, condominium fees, insurance, loan interest, repair and maintenance costs, as well as personnel expenses if applicable. Depreciation on real estate and furniture and accessories are also deductible, thus directly reducing the tax on rental income.

Strategies for optimizing deductions

To optimize deductions, repairs and improvements must be planned strategically in order to maximize deductions while improving the value and attractiveness of the property. Good depreciation management, while respecting the periods of use of goods and equipment, makes it possible to distribute expenses wisely over several years. Using a real estate tax specialist like Qlower can also help identify potentially overlooked deductions and optimize rental income tax reporting.

Limits and constraints of LMNP Réel

Deficit capping and deferral

The LMNP Réel regime makes it possible to deduct real expenses and depreciate the property, but it should be noted that the deficit generated is not imputed differently depending on its origin. The deficit resulting from deductible expenses is charged over the following 10 years, while the deficit resulting from amortization is charged to the next financial years with no time limit.

Let's say you have an LMNP deficit of €5,000 generated this year. Over the next 10 years, you can use this deficit to offset similar future benefits.

• Year 2: Profit of €3,000: use of €3,000 from the “deficit reservoir” → €0 result
• Year 3: Profit of €3,000: use of €2,000 remaining from the “deficit reservoir” → €1000 result
• Year 4: Profit of €3,000: €3,000 result

In this case, you can use the €5,000 deficit in year 1 to cancel out the taxable profit in year 2 (€3,000), and the rest of the deficit (€2,000) can be carried forward to year 2.

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Resale conditions and fiscal impact

The decision to resell a property under LMNP can have significant tax implications, mainly with regard to real estate capital gains. In 2025, upon resale, the capital gains made will be subject to taxation according to the tax regime for individuals. In addition, allowances for holding periods apply, thus reducing the tax base and mitigating the fiscal impact of the transaction. After 22 years of ownership, the capital gain tax disappears completely. After 30 years of detention, social security contributions on capital gain disappear completely. These tax aspects must therefore be taken into account when planning the resale of an LMNP property. Again, ask Qlower experts to run simulations.

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Comparison with other real estate investments (Pinel, SCI, etc.)

Compared to other devices such as the Pinel law (which disappeared in 2024) or investment via an SCI, the LMNP Réel offers flexibility and attractive tax optimization on rental income. However, each option has its own advantages, constraints, and optimal application contexts, requiring a thorough analysis according to the individual objectives and situations of the investor.