What is the unprofessional furnished rental (LMNP)?
LMNP stands for Non-Professional Furnished Rental, it is a tax legal status that concerns real estate investors in furnished rentals (new and old properties).
To obtain this legal and fiscal status, a few conditions must be met. French residents and non-residents are subject to the same eligibility conditions.
Good to know :
> 7.5% for a non-resident of the EEA area or Switzerland.
> Capital gains tax is the same for residents as for non-LMNP residents and is 19%.
To obtain this legal and fiscal status, a few conditions must be met. French residents and non-residents are subject to the same eligibility conditions.
Good to know :
- The LMNP status is not subject to social contributions.
- Social security contributions represent:
> 7.5% for a non-resident of the EEA area or Switzerland.
> Capital gains tax is the same for residents as for non-LMNP residents and is 19%.
What are the conditions to be eligible?
It is possible to carry out the activity of professional lessor when two conditions are met:
Furnished rental, even if it is practiced by a non-professional, constitutes a commercial activity. The resulting profits must be taxed.
Namely:
- The annual revenue withdrawn by all members of the tax household exceeds €23,000 (in relation to this activity),
- The receipts exceed the income of the tax household subject to income tax in the categories of wages and salaries within the meaning of Article 79 of the CGI, BIC other than those derived from the furnished rental activity, agricultural profits and non-commercial profits.
Furnished rental, even if it is practiced by a non-professional, constitutes a commercial activity. The resulting profits must be taxed.
Namely:
- The dwelling must be for residential use, and this must be authorized by the condominium regulations if necessary
- Housing must be decent, in good condition and in compliance with standards
How do I declare income?
With regard to income in LMNP, it is requested to file the declaration n ° 2042-C-PRO. 2 tax regimes are possible:
A flat-rate allowance of 50% is automatically applied.
In the case of a furnished tourist accommodation, a rural cottage or a bed and breakfast, a flat-rate allowance of 71% will be applied.
The application of the micro regime is automatic if the rental income does not exceed :
It will be necessary to report the tax result determined on the declaration n ° 2031 filed:
> if you have only one furnished rental property, to the Business Tax Service (SIE) on which the furnished property depends, or,
> if you have several properties, to the SIE on which your most important furnished accommodation depends.
- 1. The micro BIC scheme
A flat-rate allowance of 50% is automatically applied.
In the case of a furnished tourist accommodation, a rural cottage or a bed and breakfast, a flat-rate allowance of 71% will be applied.
The application of the micro regime is automatic if the rental income does not exceed :
- €15,000 for empty rental
- €72,600 for classic furnished rentals
- 176 200 € for the furnished tourist accommodation
- 2. The real regime
It will be necessary to report the tax result determined on the declaration n ° 2031 filed:
> if you have only one furnished rental property, to the Business Tax Service (SIE) on which the furnished property depends, or,
> if you have several properties, to the SIE on which your most important furnished accommodation depends.
Empty rental :
> Real Land Regime : beyond € 15,000 rent or optional, all charges are deductible from property income
Social security contributions (excluding non-residents, cross-border workers and expatriates): 17.2% of taxable income (CSG – CRDS)
- Lease duration : 3 years minimum (renewable by tacit agreement)
- Security deposit : 1 month's rent (excluding charges)
- Notice (owner): 6 months before the end of the lease
- Notice (tenant ): 3 months (1 month under conditions, especially in tense areas)
- Status : /
- Tax system // Non-resident tax system:
> Real Land Regime : beyond € 15,000 rent or optional, all charges are deductible from property income
Social security contributions (excluding non-residents, cross-border workers and expatriates): 17.2% of taxable income (CSG – CRDS)
Furnished rental :
> Simplified Real Regime : beyond € 77,700 or optional, all expenses are deductible + depreciation of the value of the property
- Lease duration : 1 year minimum, or 9 months in student rental (in the case of accommodation rented as a main residence)
- Security deposit : 1 year minimum, or 9 months in student rental (in the case of accommodation rented as a main residence)
- Notice (owner): 3 months before the end of the lease
- Notice (tenant): 1 month
- Status : Professional or non-professional furnished lessor (LMP/LMNP)
- Tax system // Non-resident tax system:
> Simplified Real Regime : beyond € 77,700 or optional, all expenses are deductible + depreciation of the value of the property
- Social security contributions (excluding non-residents, cross-border workers and expatriates): 17.2% of taxable income (CSG – CRDS)
What taxes do I have to pay?
- The Business Property Assessment (CFE)
- Property tax
- The housing tax, which is due by the occupant on 1 January of the year
- The tourist tax: set up by the municipal councils in classified resorts and in tourist communes. Its amount varies according to the type of accommodation and whether it is classified or not. However, it is between 1 and 5% of the rent per person per night
- The Generalized Social Contribution (CSG), the solidarity levy and the Contribution to the Repayment of the Social Debt (CRDS) which correspond to an overall rate of 17.2%
- VAT but the rental must be accompanied by at least 3 of the 4 para hotel services (breakfast, cleaning of the premises, supply of linen and customer reception).
- Seasonal rentals and furnished rentals in serviced residences are concerned.
A furnished accommodation must include at least:
The judge may decide to reclassify the rental contract for furnished accommodation as a bare/empty housing contract, in the event of non-compliance with this list.
- Bedding (bed or sofa bed) with duvet or blanket
- Device concealing windows in rooms (shutters or thick curtains)
- Hobs (built-in or separate)
- Oven or microwave oven
- Refrigerator
- Freezer or freezer compartment of the refrigerator with a maximum temperature of -6°
- Sufficient number of dishes for occupants to take meals (plates, cutlery, glasses, etc.)
- Kitchen utensils (pots, pans, etc.)
- Table
- Seats
- Storage shelves
- Light fixtures
- Housekeeping equipment adapted to the characteristics of the accommodation (vacuum cleaner if there is carpet, broom and mop for tiles ...)
The judge may decide to reclassify the rental contract for furnished accommodation as a bare/empty housing contract, in the event of non-compliance with this list.
How do I obtain LMNP status?
If this is the beginning of your activity as a non-professional furnished rental company (LMNP), and it is therefore the first time you rent furnished property; it is imperative to fill in the Cerfa n ° 11921 * 07 or P0i from the beginning of the rental , that is to say within the first 15 days of the beginning of the rental of the property.
1.Si you are on the micro BIC diet
2.Si you are on the simplified real regime
If you are a member of an approved management organization and you use the services of an accounting professional, you will have to indicate the amount of profit calculated on the declaration n ° 2031 in specific boxes.
If, however, you are not a member of an approved management organization and you do not use the services of an accounting professional, you will have to indicate the amount of the profit in other specific boxes.
1.Si you are on the micro BIC diet
- It will be necessary to indicate the total amount of the sums you have collected (rents, charges invoiced to the tenant and provisions for charges) for your rentals excluding rental of guest rooms and furnished tourism. A flat-rate allowance of 50% will be applied.
- It will be necessary to indicate the total amount of income from the rental of classified furnished tourist accommodation or bed and breakfast. A flat-rate allowance of 71% will be applied.
2.Si you are on the simplified real regime
If you are a member of an approved management organization and you use the services of an accounting professional, you will have to indicate the amount of profit calculated on the declaration n ° 2031 in specific boxes.
If, however, you are not a member of an approved management organization and you do not use the services of an accounting professional, you will have to indicate the amount of the profit in other specific boxes.
Ce qu’il faut retenir :
LMNP stands for Non-Professional Furnished Rental, it is a tax legal status that concerns real estate investors in furnished rentals (new and old properties).
To obtain this legal and fiscal status, a few conditions must be met. French residents and non-residents are subject to the same eligibility conditions.
To obtain this legal and fiscal status, a few conditions must be met. French residents and non-residents are subject to the same eligibility conditions.
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Posted on 23/03/2023 by
Andy LECUYER
