Non-resident LMNP: taxation and optimisation of furnished rental income in France

You rent out a furnished property in France from abroad, and two questions keep coming up: actual regime or micro-BIC, and does my non-resident status change anything? The short answer is yes, on several specific points, and one of them has just changed profoundly with the 2026 finance act. At ImmoPourExpat, we have supported more than 1,000 French people spread across more than 60 countries, and LMNP remains one of the statuses most poorly exploited by expats, often because they apply rules designed for a resident without checking what really changes for them. This guide sorts it out.

Why is LMNP taxation different for a non-resident?

LMNP status: definition and conditions

The status of non-professional furnished landlord falls under the industrial and commercial profits (BIC) regime, but applied to an individual. According toarticle 155, IV of the Code général des impôts, you are LMNP as long as your furnished rental receipts remain below €23,000 per year, or remain lower than your other professional income. Exceed both at once, and you switch to LMP (professional furnished landlord), a status with very different rules.

What your non-resident status changes

In practice, three things are different for you: you are subject to a minimum tax rate specific to non-residents, your rate of social contributions depends on your social security scheme, and since this year, the method of calculating the LMP/LMNP threshold has changed in your favour in many cases.

Micro-BIC regime vs actual regime: what is the difference for a non-resident?

Micro-BIC regime: simplicity, but limited allowance

If your annual rental receipts do not exceed €77,700 (2025 income; this threshold rises to €83,600 for 2026 income as part of the three-yearly revaluation), you can stay under micro-BIC: a flat-rate allowance of 50 % applies automatically to your gross receipts, without having to justify any expense. It is simple, but it completely ignores depreciation, which is often your most powerful tax lever.

Be careful not to confuse this threshold with that for tourist furnished rentals unclassified (Airbnb-type short-term), lowered since the Le Meur law to 15 000 € with the allowance reduced to 30%. If you rent all year round (including house share), it is indeed the €77,700 threshold that applies to you, not that one.

Actual regime: declaring actual expenses, and depreciation

Under the actual regime, you deduct your actual expenses and you depreciate the property and furniture. It is heavier administratively, but this is where most of the optimisation happens. The regime becomes compulsory after two consecutive years above the micro-BIC threshold, but you can also adopt it by option, from the first year, if it is more favourable for you.

Deductible expenses under the LMNP actual regime

Direct expenses

Property tax, non-occupying landlord insurance, maintenance and repair costs, management fees (agency, accountant), business property contribution: all of this reduces your taxable result.

Indirect expenses: loan interest and depreciation

Unlike capital gains on property, where loan interest never counts, here it is fully deductible from your rental income. Depreciation is calculated by component: the property is split into several elements (structure, roof, installations, fittings), each depreciated over its own period, plus furniture separately over 5 to 10 years. There is no single official grid: the breakdown and periods depend on the actual condition of the property and are set by your chartered accountant, within a legal ceiling (depreciation can never create or worsen a deficit, the excess is carried forward without time limit).

“You collect €10,000 in rent. If you have €8,000 of depreciation and expenses, your taxable income can be reduced to just €2,000. In most cases, you will end up with €0 in accounting result, which is an advantage, because depreciation is an expense that is not real: it ultimately corresponds to your cash flow.” Frédéric Moreau, founder of ImmoPourExpat

One point to know before rushing headlong into depreciation: since the reform that came into force for sales made from 15 February 2025, the depreciation you have deducted under the actual regime is now added back in the calculation of your capital gain at the time of resale. This is not a reason to give up depreciation, it is a reason to anticipate it in your exit strategy.

Non-deductible expenses

Your income tax itself, and your personal social contributions (those not linked to the rental activity, if you are LMP), are never deductible.

Remote management fees: deductible

If you use an agency, a concierge service or a specialist chartered accountant to manage your property from abroad, these fees are deductible expenses like any other. Agency, independent or self-management: here is how to choose your remote management method.

Taxation of LMNP income for a non-resident

A minimum rate specific to non-residents

Article 197A of the Code général des impôts sets a minimum tax rate for your French-source income: 20% up to €29,579 of net taxable income (2026 threshold), 30% beyond. You can escape this floor if you show, by option, that applying the average tax rate on all your worldwide income to your French share alone would be more favourable. This rate applies to the taxable result after expenses and depreciation, often very low under the actual regime.

Social contributions: 18.6% or 7.5% depending on your social security scheme

If you are affiliated to a compulsory social security scheme in the EU, the EEA or Switzerland, you benefit from the reduced rate of 7,5 %. Otherwise, the full rate applies, now 18,6 % since the CSG increase voted for 2026. This is a real difference from capital gains on property, which remains excluded from this increase: on BIC income, the increase does apply.

Social contributions: the real tipping point between LMP and LMNP

Under LMNP, you only pay the social contributions above, no professional contributions. Under LMP, you switch to the social contributions regime for the self-employed, of the order of 35% on your profit, in exchange for better offsetting of your deficits (against your overall income rather than only your rental income) and a professional capital gains regime. For a non-resident, affiliation to this regime can pose practical difficulties depending on your country, to be checked case by case before committing.

The impact of your country’s tax treaty

This is a point I systematically push people to check, because theimpact of the tax treaty on your furnished income really varies from one country to another.

“Depending on your country of residence, the tax treatment can vary. Some treaties provide that rental income is taxable only in France. Others allow taxation in your country of residence with a tax credit. And others consider that the tax rules of LMNP in France do not apply at all in your country of residence, in which case its own rules are imposed on you.” Frédéric Moreau

The LMP threshold in 2026: the reform that changes the game for non-residents

This is the most important change for you this year, and it is still poorly known. Before 2026, to determine whether your rental receipts exceeded your “other professional income” (one of the two LMP criteria), the tax authorities only counted your professional income taxable in France. For an expat employed abroad, this amount was often equal to zero, which tipped you into LMP as soon as your rents exceeded €23,000, even with a very good salary elsewhere.

Since 1 January 2026, a new paragraph of article 155, IV of the Code général des impôts changes the rule : your worldwide professional income is now taken into account, provided it is subject, in your country of residence, to a tax equivalent to French income tax. In practice, a salary abroad of €80,000 compared with €25,000 of rents now keeps you in LMNP, whereas before this reform you would have switched to LMP.

LMNP optimisation strategies for non-residents

Choose the right regime for your situation

If you have a mortgage running or significant expenses, the actual regime is almost always the winner. Micro-BIC only becomes competitive for a property with no mortgage and very few actual expenses.

Maximise deductible expenses

Keep every invoice for works, furniture and remote management fees from the start, it makes your accountant’s work easier and secures your return in case of an audit.

Structure your ownership: personal name, SCI or family SARL

It is a tax trade-off to make before the purchase, not after.

“It is not a copy-and-paste story, each situation has its own suitable taxation.” Frédéric Moreau

• In personal name : this is classic LMNP, simple, with depreciation, but slightly more active management than unfurnished rental (you have to furnish, maintain, renew).
• SCI subject to income tax : to be avoided for furnished rental. Furnished rental is almost prohibited there (unless it represents less than 10% of rents received), and without possible depreciation, taxation is much heavier.
• SCI subject to corporate tax : furnished rental becomes possible there, with a corporation tax rate of 15% up to €42,500 of profit then 25% beyond, and the same depreciation mechanisms. The drawback is that the money stays in the company, not directly in your pocket, and for a non-resident based in certain countries (Monaco, Switzerland, Luxembourg), there is a risk, rare but real, of reclassification as a de facto company locally.
• Family SARL : it combines the advantages of LMNP (depreciation) and those of a company (structuring between partners, liability protection), with a possible option for income tax that avoids the double taxation of the SCI under IS. The downside: social contributions for the majority manager even without pay, and above all a real banking difficulty, few institutions finance a family SARL, even fewer for a non-resident.

Anticipate the timing of resale

Since depreciation has been added back in the capital gain calculation, the question is no longer only when to sell for the holding-period allowance, but also how much you have depreciated by then.

Illustrative example: actual regime vs micro-BIC

Let us take a simple case, by way of illustration: a furnished studio let at €12,000 of annual rent, with a mortgage generating €3,000 of interest, €1,500 of various expenses (property tax, insurance, CFE), and depreciation estimated at €5,000 for the year.

• Under micro-BIC: flat-rate allowance of 50%, taxable base of €6,000
• Under the actual regime: €12,000 − €3,000 (interest) − €1,500 (expenses) − €5,000 (depreciation) = taxable base of 2 500 €

Here the actual regime reduces the taxable base by more than half compared with micro-BIC, without even counting that depreciation can often, in the first years, bring the result even closer to zero. This is a simplified example: each real situation depends on the condition of the property, the amount of the mortgage and the breakdown chosen for depreciation.

LMNP tax return for non-residents

Where and how to declare

Under micro-BIC, you simply enter your gross receipts on form 2042-C-PRO, and the allowance applies automatically. Under the actual regime, you must file a complete tax return package (form 2031-SD and its appendices 2033-A à G : simplified balance sheet, income statement, depreciation, provisions), which must be filed electronically, then carry the result over to the 2042-C-PRO. Do not forget the business property contribution (CFE), due even under LMNP: an initial declaration (form 1447-C-SD) before 31 December of your first year of activity, then an annual payment in two instalments, an advance in June and the balance in December.

Deadlines and penalties for late filing

The penalty regime is the same as for any income tax return : a 10% surcharge for spontaneous late filing, 20% then 40% if you do not react after a formal notice, and up to 80% for undeclared activity, to which are added late-payment interest of 0.20% per month.

Help from a chartered accountant: when it is essential

As soon as you move to the actual regime, the tax return package becomes hard to handle alone, especially remotely. It is a real profession, and for our non-resident members, we work with Amarris, a partner accounting firm specialising in these issues, which knows the specifics of expat cases (depreciation, thresholds, remote filing).

FAQ: non-resident LMNP

Can a non-resident benefit from LMNP status?

Yes, nothing prevents it. What changes for you is the minimum tax rate, the rate of social contributions depending on your country, and since 2026, the method of calculating the LMP threshold.

Is the actual regime really more advantageous than micro-BIC?

In the vast majority of cases where you have a mortgage running, yes, thanks to depreciation of the property and furniture, which does not exist under micro-BIC.

How does the 2026 reform of the LMP threshold work for non-residents?

Since 1 January 2026, your worldwide professional income (and no longer only French) is taken into account to determine whether you fall under LMNP or LMP, provided it is subject to a tax equivalent to IR in your country of residence.

Is depreciation really without consequence?

No, not since 2025: depreciation deducted under the actual regime is now added back in the calculation of your capital gain at resale. It remains advantageous, but it needs to be planned.

Should you invest in LMNP through an SCI?

Not through an SCI subject to income tax, where furnished rental is almost impossible. An SCI under IS allows it, but keeps the money in the company. The family SARL often combines the advantages better, provided you find a bank willing to finance it.

What are the filing deadlines for a non-resident LMNP?

Under micro-BIC, the return follows the standard income tax calendar (May-June). Under the actual regime, the tax return package must be filed electronically in early May, before carrying it over to your income tax return.

Ready to optimise your LMNP taxation? Our experts have supported more than 1,000 French expats in more than 60 countries, including on the micro-BIC / actual regime trade-off and the choice of the right structure. Let us analyse your situation free of charge. Request my free analysis