Guide to LMNP Status: Formalities to Start Your Activity in France in 2025

The Non-Professional Furnished Rental (LMNP) is a tax-efficient option highly appreciated by rental investors. When the property is suitable for furnished rental (typically a small or medium-sized apartment or a vacation rental), the owner can benefit from a tax regime that combines the advantages of both professionals (property depreciation) and individuals (minimized capital gains tax upon resale).

More specifically, property depreciation allows the owner to account for the property’s wear and tear as a significant expense, which offsets rental income and can reduce taxes to zero for several years. For the calculation of taxable capital gains, the difference between the selling price and the purchase price, including fees and renovation costs, is considered.

In the case of Professional Furnished Rental (LMP) or a Real Estate Investment Company (SCI), the calculation is based on the difference between the selling price and the depreciated purchase price, which makes a substantial difference.

 

However, several steps are necessary to obtain LMNP status. We decode them here.

 

Below is the LMNP Status Guide to declare your activity and avoid taxes on your furnished rental income.

Table of Contents

Statut LMNP

1. Declare Your LMNP Activity to Obtain Your SIRET Registration

The SIREN (9 digits) is the identification number of a company. The SIRET (the SIREN complemented by 5 digits) identifies an establishment. For your first investment in furnished rental, you need to create a small business with one establishment, which is the address of your rental property. This is done by completing the P0i form with the Commercial Court Registry. This activity declaration grants you access to the business tax regime (the BIC regime for Industrial and Commercial Profits, allowing depreciation) and also enables the electronic submission of tax declarations through Qlower.

When you make a second furnished rental investment, you simply add a new establishment (a new address) to your rental activity by completing the P2P4i form.

Qlower handles these formalities for €200 including tax, but it is possible to do it independently, although it is more time-consuming (P0i here and P2P4i here).

At this stage, you need to choose the tax regime (Micro-BIC or Real BIC). The Real BIC is more advantageous in the vast majority of cases.

Note that for Alsace-Moselle or joint ownerships, there are specific rules that we do not cover here.

Within a few weeks, you will receive a letter from INSEE indicating your registration. Be sure to verify it, as errors are possible.

2. The 751 SD Form to Specify the Business Property Tax (CFE)

Once you receive your SIRET number from INSEE, you will receive from the Business Tax Service (SIE) a “questionnaire related to professional activity” or form 751 SD, in which you are asked for additional information to determine the amount of the CFE (Cotisation Foncière des Entreprises).

This tax applies to businesses, and each LMNP lessor is liable for it from the second year of activity (under certain conditions).

 

Qlower also assists you with a detailed explanatory notice here.

 

3. Creating Your Professional Account on impots.gouv.fr is Fundamental for Your LMNP Status

Even though the LMNP activity is explicitly Non-Professional, it still requires the creation of a professional account to receive information from the tax authorities. This information is to be retrieved on the tax PRO portal and is not sent to real estate investors (currently), although we are working on it.

Creating a professional account involves two steps:

  1. Create your account in simplified mode (sufficient for LMNP) by filling in the login information, name, email, and defining your password. Note that you need an email address that is not already used by another professional account. Otherwise, you need to switch to Expert mode.

  2. Activate your account first via the email received within 48 hours, then with the activation code received by mail within two weeks. Only at this stage can you register your bank account details to pay taxes and various fees.

With your Qlower account in hand, you now have all the necessary tools and spaces for the perfect management of your LMNP activity.

What Will Be the Next Steps?

4. The 1447 C SD Form for the Payment of the Business Property Tax (CFE)

After declaring your activity using the P0i form and submitting the 751 SD form, you will not receive the 1447 C SD form for the payment of the business property tax (CFE). You need to retrieve it from your previously created professional tax account. Payment of this tax is mandatory for all furnished rentals, whether declared under the Micro-BIC regime, Real BIC, or even in an SCI under corporate tax.

The payment of the CFE will be made from your professional impots.gouv account.

The 1447 C SD form is generally available in October each year; we will remind you of this obligation in due course.

5. Payment of the Property Tax, with Partial Rebilling to the Tenant (Under Certain Conditions)

In November, you receive your property tax notice, which should be paid according to the usual procedures of the personal tax space. Qlower assists you in identifying the portion that can be rebilled to the tenant (the Household Waste Collection Tax). The remaining part of this tax is a deductible expense from your rental income.

6. Declaration of Rental Income (2031 and Annexes 2033)

Starting in January, we identify any forgotten deductible expenses (property tax, renovations, insurance, etc.), verify rental income, and clarify details with supporting documents. Our algorithms generate each annex (2033 A, B, C, D, E) and consolidate them into the 2031 Bis and 2031 tax declaration.

Once completed, the fiscal package is reviewed by Qlower’s experienced accountants, who certify each file remotely from their homes. (Supporting senior employment is a cause championed by Qlower.)

After this verification, as soon as the tax e-filing service opens in March, the fiscal package is electronically transmitted to the tax authorities using your SIRET number (see step 1).

We then prepare a personalized financial report summarizing your year’s activity and highlighting any key points of attention.

7. Reporting to Your Personal Income Tax Declaration: Annex 2042 C Pro

The final result of the past year’s financial statements, calculated for the 2031 tax declaration (see step 6), is reported in your personal income tax return, alongside your salary and other sources of income.

By April or May, we guide you on which fields to fill out, which amounts to enter, and what information to include.

And that’s it! You’re free to enjoy your spring weekend!

Conseil Qlower

At every step of the year, Qlower and its team support you, helping you gain both peace of mind and profitability!

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