Not all owners of furnished homes know it, but they have a choice between two radically different tax regimes. The right choice can divide your tax by 5 over 10 years.
Micro-BIC: simplicity
If your annual receipts are below €77,700, you are eligible. The tax authorities apply a flat-rate allowance of 50% to your rents. You are taxed on the remaining half. No accounts to keep, just a box to tick.
The actual regime: power
Under the actual regime, you deduct ALL actual expenses (co-ownership charges, loan interest, property tax, management fees, accountant, insurance, maintenance works), PLUS the depreciation of the property and the furniture. Depreciation is a non-cash accounting expense that reduces the taxable result without any actual outlay.
Chart
Cumulative tax on rents over 10 years
Furnished property in Lille: rents of €10,800 a year, actual expenses of €4,200 a year, depreciation of €4,000 a year. Marginal tax band of 30% + 17.2% social levies.
How do you switch to the actual regime?
- 1The option must be made with the tax office BEFORE 31 May of the year concerned (e.g. for 2026 income, option before 31 May 2026).
- 2A commitment of at least 1 year, tacitly renewable.
- 3Simplified business accounts must be kept: journals, balance sheet, profit and loss account.
- 4Use a chartered accountant specialising in LMNP (~€400 a year) or dedicated software.