Unfurnished or Furnished Rental: What Are the Tax Differences?

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Are you planning to rent out a property in Nice and unsure whether to choose a furnished or unfurnished rental? In France, this decision goes beyond tenant comfort: it has a direct impact on how your income is taxed.

In this article, the Winter Immobilier team compares the tax regimes applicable to each option to help you maximize your rental income while staying fully compliant with French tax law.

Comparison Table: Furnished vs. Unfurnished Rental Taxation

Tax Criteria	Furnished Rental (LMNP/LMP)	Unfurnished Rental
Tax regime	BIC (micro-BIC or standard)	Property income (micro-foncier or standard)
Flat-rate deduction (micro regime)	50% (71% for tourist rentals)	30%
Income threshold for micro regime	Up to €77,700 per year	Up to €15,000 per year
Deductible expenses (standard regime)	Yes + depreciation of property and furniture	Yes (but no depreciation)
Depreciation allowed	Yes	No
Deficit carryforward	Up to 10 years, on BIC income only	Offset against total income (up to €10,700 per year)
Average profitability (before tax)	10 to 30% higher depending on the area in Nice	Lower
Administrative formalities	More complex, accounting support recommended	Simpler

Taxation of Furnished Rentals: A More Profitable Option for Landlords

Choosing a furnished rental means opting for a more flexible and profitable tax structure.

Rental income is taxed under the Industrial and Commercial Profits (BIC) category, with two possible systems: the micro-BIC, offering a 50% flat-rate deduction, or the standard (réel) regime, which is significantly more advantageous for investors.

The standard regime allows you to deduct all actual expenses (management fees, repairs, loan interest, etc.) and depreciate both the property and its furniture, substantially reducing taxable income.

In many cases, this means little to no taxation for several years. This approach, particularly popular in Nice where furnished rentals are in high demand, requires professional guidance, a service Winter Immobilier has provided for over 60 years.

Taxation of Unfurnished Rentals: Stability but Less Flexibility

With an unfurnished rental, your income is taxed under the property income category.

Two systems apply: the micro-foncier regime, offering a 30% flat-rate deduction if annual rent is below €15,000, or the standard (réel) regime, which allows the deduction of certain expenses (repairs, loan interest, property tax, management fees, etc.).

Unlike furnished rentals, no depreciation is allowed, which limits tax optimization opportunities. However, the standard regime may still be relevant if you have substantial deductible costs. This option often appeals to owners seeking administrative simplicity and stability, especially those who prefer not to furnish their property.

That said, in a competitive market like Nice, unfurnished rentals can prove less profitable in the long run.

Turning an Unfurnished Property into a Furnished One: Tax Considerations

Switching from an unfurnished to a furnished rental can provide significant tax benefits, but some precautions are required.

First, make sure your building’s bylaws authorize furnished rentals, especially short-term lets.

Also verify that you have not deducted a property deficit over the past three years, as doing so could trigger a tax reassessment.

Once those checks are complete, you will need to furnish the property according to the official equipment list, sign a furnished lease, and register your activity using the P0i form.

If you choose the standard regime, you will also need to file a full accounting statement and a tax declaration.

Winter Immobilier’s added value: these steps may seem complex, but with Winter Immobilier’s comprehensive property management services in Nice, you benefit from full support ensuring compliance, peace of mind, and tax efficiency.

Should you opt for a simpler but less profitable tax system with an unfurnished rental, or aim for a more sophisticated tax optimization strategy through a furnished rental?

Your decision should be based on a personalized analysis of your goals and Nice’s local market conditions.

At Winter Immobilier, we are here to help you secure your investments and guide you toward the most advantageous tax regime, backed by over 60 years of expertise in the Nice real estate market.

Contact us today for personalized guidance!