LMNP or LMP: which status to choose to optimise your furnished rental taxation?

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Summary table

Criterion	LMNP (Non-Professional Furnished Landlord)	LMP (Professional Furnished Landlord)
Eligibility requirements	Rental income ≤ 23,000 euros or less than the household's other income	Rental income > 23,000 euros and greater than the household's other income
Tax category	BIC: micro-BIC or actual expense scheme	BIC: micro-BIC or actual expense scheme
Main tax advantage	Depreciation of the property and furnishings, which can reduce tax on rental income for 15 to 20 years	Deficit deductible from total income without any cap
Capital gains on resale	Private individual scheme (but depreciation now factored back in following the recent reform)	Professional capital gains scheme
Possible exemption	Full exemption after 22 years (income tax) and 30 years (social contributions)	Full exemption possible after 5 years if average turnover < 90,000 euros
Social contributions	None (social levies at 17.2%)	Yes, approximately 35% to 45% of profit
Investor profile	Wealth-building investor or supplementary rental income	Investor with substantial furnished rental activity

What are the requirements for LMNP or LMP status?

Switching from LMNP to LMP is not a voluntary choice: it is the nature of your income that determines your status.

To qualify as a professional furnished landlord, two cumulative conditions must be met: your annual rental income exceeds 23,000 euros (including VAT), and this income is greater than all other earned income within your tax household.

If either condition is not met, you retain non-professional furnished landlord status.

The view from Winter Immobilier: in Nice, where furnished rental yields are high, the 23,000-euro threshold can be reached quickly, particularly with seasonal lettings.

How does taxation work under LMNP?

Non-professional furnished rental income falls within the category of industrial and commercial profits (BIC).

Two schemes are available: the micro-BIC, which applies a flat-rate deduction of 50% on standard furnished rentals (capped at 77,700 euros in receipts) and 50% on classified tourist accommodation, or the actual expense scheme, which allows you to deduct all your expenses and, crucially, to depreciate the property and its furnishings.

It is this depreciation mechanism that makes LMNP so attractive: it can reduce your taxable base to zero for many years.

As Olivier Roquin, Director of Winter Immobilier, points out: "In Nice and along the French Riviera, the actual expense scheme under LMNP remains the most relevant option for our investor clients. Depreciation can neutralise tax on rental income for 15 to 20 years."

What tax advantages does LMP status offer?

Professional furnished landlord status offers additional advantages over LMNP, but also entails greater obligations.

The main benefit of LMP lies in the ability to offset the deficit directly against your total income, with no cap. Under LMNP, any deficit can only be set against income of the same category over a 10-year period.

LMP also provides access to a professional capital gains exemption after 5 years of activity, provided your average turnover over 2 years remains below 90,000 euros. In return, LMP requires registration with the self-employed social security scheme and the payment of social contributions on your profits.

The view from Winter Immobilier: switching to LMP is not always beneficial. Social contributions amount to roughly 35% to 45% of profit, which can offset a significant share of the tax savings.

What are the major changes since 2025?

The 2025 Finance Act has fundamentally reshaped furnished rental taxation. The most significant change concerns the reintegration of depreciation into the capital gains calculation for LMNP upon resale of the property.

In practical terms, if you have depreciated 100,000 euros on your property, this amount is now added to the taxable capital gain at the time of sale.

This measure brings LMNP taxation closer to that of LMP, where depreciation has always been factored back in. Managed residences (care homes, student housing) are, however, exempt from this reform.

In addition, the micro-BIC threshold for unclassified tourist accommodation has been lowered to 15,000 euros, with the flat-rate deduction reduced to 30%.

How to choose between LMNP and LMP for a property investment?

The choice between LMNP and LMP depends primarily on the volume of your rental income and your overall tax position.

LMNP suits investors whose furnished rental income remains moderate and who wish to benefit from depreciation without the obligations of professional status.

LMP is aimed at investors with a substantial furnished rental portfolio, generating over 23,000 euros in annual income, who can take advantage of the deficit offset against total income and the capital gains exemption.

In Nice, where furnished rental yields range from 4% to 7% depending on the neighbourhood, our agency observes that the majority of investors remain under LMNP, although a growing number are switching to LMP as seasonal rents continue to rise.

Which tax scheme should you choose under LMNP or LMP?

Whether you are LMNP or LMP, selecting the right tax scheme is key to optimising your rental taxation.

Micro-BIC: simplicity and a flat-rate deduction

The micro-BIC applies automatically if your income does not exceed the current thresholds. It offers a flat-rate deduction of 50% on standard furnished rental income. Its simplicity is an asset for smaller investments, but it does not allow you to deduct actual expenses or to depreciate the property.

The actual expense scheme: optimisation through depreciation

The actual expense scheme allows you to deduct all your expenses (loan interest, renovation work, insurance, management fees) and, most importantly, to apply accounting depreciation to both the property and its furnishings. On a Nice property acquired for 300,000 euros, depreciation can represent 8,000 to 10,000 euros in annual deductions. This is the scheme favoured by investors working with our agency.

LMNP and LMP: what impact on capital gains at resale?

Capital gains on resale are a critical consideration when choosing between LMNP and LMP.

Under LMNP, capital gains historically fell under the private individual scheme, with a progressive allowance based on the period of ownership and full exemption after 22 years for income tax purposes.

Since 2025, however, depreciation previously deducted now increases the taxable capital gain, which reduces the benefit of this scheme. Under LMP, capital gains fall under the professional scheme: depreciation has always been factored back in, but full exemption is possible after 5 years of activity if average turnover remains below 90,000 euros.

This mechanism can prove far more advantageous for investors who exceed the LMNP thresholds.

What are the reporting obligations under LMNP and LMP?

Administrative obligations differ considerably between the two furnished rental statuses.

Under LMNP with the micro-BIC scheme, you simply report your income on the supplementary income tax return. Under the actual expense scheme, you must file a full set of tax accounts.

Under LMP, the obligations are more demanding: registration with the trade register, enrolment with the self-employed social security scheme, filing of profit-and-loss accounts, and quarterly social contribution payments.

Are you wondering which status, LMNP or LMP, best suits your furnished rental investment in Nice or on the French Riviera? Every financial situation calls for a tailored analysis, taking into account your income, your intended holding period and your estate-planning goals.

Why not discuss it with an expert? Contact Winter Immobilier for a personalised consultation!

FAQ - LMNP or LMP

What is the main difference between LMNP and LMP?

The main difference between LMNP and LMP lies in the income conditions. You qualify as LMP if your furnished rental income exceeds 23,000 euros per year and is greater than your other earned income. Below these thresholds, you remain LMNP.

Can you freely choose between LMNP and LMP status?

No, you cannot freely choose between LMNP and LMP. The status applies automatically based on your rental income and your other professional earnings. If both conditions are met, you are classified as LMP by default.

What are the benefits of LMNP under the actual expense scheme?

The main benefits of LMNP under the actual expense scheme are the deduction of actual costs and the accounting depreciation of the property and its furnishings. This mechanism can eliminate tax on your rental income for many years.

Does LMP require the payment of social contributions?

Yes, LMP requires the payment of social contributions. Registration with the self-employed social security scheme is compulsory, and contributions amount to approximately 35% to 45% of profit. This cost must be factored into your profitability calculations.

What has the 2025 reform changed?

The 2025 reform has made LMNP less attractive at the point of resale, as depreciation previously deducted is now factored back into the capital gains calculation. The tax advantage during the holding period nonetheless remains significant, particularly under the actual expense scheme.