The LMNP regime is based on a BIC mechanism that radically distinguishes it from the taxation of rental income. Since the finance law of February 14, 2025, the situation has changed regarding the treatment of depreciation upon resale, and the ministerial response of March 24, 2026, has removed any residual ambiguity. Here, we decode the technical points that condition the actual profitability of an investment in non-professional furnished rental.
Reintegration of LMNP Depreciation into Capital Gains: What Article 150 VB III of the CGI Changes
Article 150 VB III of the CGI now requires to reduce the acquisition price by the amount of the deducted depreciation to calculate the real estate capital gain for any transfer made from February 15, 2025, onwards. The mechanism is simple: every euro depreciated during the rental period increases the taxable capital gain upon resale.
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The ministerial response published in the Official Journal on March 24, 2026, clarified two points that many investors had not anticipated. The rule applies to all subsequent transfers, regardless of the acquisition or rental start date. All depreciation deducted during the entire rental period is taken into account, including those applied before 2025.
In practical terms, a property acquired in 2018 and resold in 2026 will have its depreciation accumulated since 2018 reintegrated into the calculation. For an investor under the real regime who has depreciated the building, furniture, and acquisition costs over several years, the impact on the taxable capital gain can be significant.
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We recommend simulating the net capital gain before making any decision to sell, incorporating the social contributions of 17.2% that apply to real estate capital gains. Once one understands the LMNP status explained from this fiscal perspective, it becomes clear that the long-term holding strategy becomes even more crucial than before the reform.
Real BIC Regime vs Micro-BIC: Technical Arbitration for Furnished Renters
The choice between the real regime and micro-BIC is not limited to a revenue threshold. It engages the entire wealth strategy.
Micro-BIC: A Flat Rate Deduction That Erodes
The Le Meur law of November 2024 has reduced the tax benefits for unclassified tourist rentals. The deductions and ceilings of the micro-BIC regime have been revised downward for this category. For long-term furnished rentals, micro-BIC remains accessible, but its flat-rate deduction does not allow for the deduction of actual expenses or the depreciation of the property.
This regime is suitable for an investor whose actual expenses are less than the flat-rate deduction, which is rare for a property financed by credit with regular maintenance work.
Real Regime: The Power of Depreciation
The depreciation of the building, furniture, and acquisition costs constitutes the central lever of the real regime. It allows for generating a zero or negative BIC result for many years, making the received rents non-taxable in the BIC category.
The depreciable components are allocated according to their useful life:
- The structural work (structure, roofing) is depreciated over the longest duration, usually several decades
- The technical equipment (heating, plumbing, electricity) follows an intermediate duration
- The furniture and appliances are depreciated over shorter durations, between five and ten years depending on the items
We observe that the allocation of components is the most often neglected technical point in declarations. A poor distribution between land (non-depreciable) and building can cost several thousand euros in lost depreciable base.
LMNP Social Contributions and Renter Status: A Treatment Gap to Integrate
The BIC income from non-professional furnished rentals is subject to social contributions, but the applicable rate differs depending on the nature of the flow. The rents collected fall under social contributions on wealth income. Real estate capital gains remain subject to social contributions of 17.2%, just like the rental income from unfurnished properties.
This distinction creates a treatment gap between current flows and capital gains that must be modeled in any rental business plan. An investor who optimizes their rents through depreciation but sells with a high gross capital gain (amplified by the reintegration of depreciation) may find themselves with an overall tax bill exceeding their initial expectations.
Rental Tension and Profitability of Furnished Rentals in 2026
The French rental market remains tight, with an average of 4.8 candidates per listing according to available data. The average rent per square meter increased faster than inflation in 2025 (about 3.3% compared to 1.3%), which enhances the economic appeal of furnished rentals for landlords.
This dynamic should not obscure the increasing constraints. New obligations regarding energy performance (DPE) also apply to furnished rentals. A property rated F or G will require work to remain on the rental market, and these works add to the deductible expenses under the real regime.
Points to check before any investment in LMNP:
- The current DPE rating of the property and the estimated cost of any necessary upgrades
- The simulation of net capital gain after reintegration of depreciation over the intended holding period
- The choice of tax regime (real or micro-BIC) based on the actual amount of expenses and debt
- The risk of transitioning to LMP status if rental income exceeds legal thresholds
The LMNP status remains an effective tax framework for structuring a furnished rental investment, provided one masters the depreciation mechanics and integrates the capital gains reform into their projections. Profitability is no longer measured solely on tax-exempt rental flows: it is calculated over the complete cycle, from acquisition to sale.