Taxation of furnished rentals in Paris: LMNP, actual-expenses regime and tax optimization in 2026

Short-term furnished rental offers far more advantageous taxation than unfurnished rental — provided you choose the right regime. An overview of the options available in 2026.

LMNP: the basic status for individuals

If you rent out your furnished apartment without making it your main activity, you fall under the status of non-professional furnished landlord (Loueur Meublé Non Professionnel, LMNP). That is the case for the vast majority of Paris owners who entrust their property to an operator like Belvie.

Under this status, your rental income is taxed in the category of industrial and commercial profits (Bénéfices Industriels et Commerciaux, BIC), and not as property income. This distinction is fundamental: it opens access to much more powerful tax optimization mechanisms.

Micro-BIC: simple but limited

The micro-BIC simplified tax regime applies automatically if your annual rental receipts do not exceed €77,700 (2026 threshold for standard furnished rentals). It gives you a flat-rate allowance of 50% on your income: you are taxed on only half of what you receive.

It is simple to manage, but rarely optimal for a Paris apartment: the flat-rate allowance takes into account neither your actual expenses nor the depreciation of your property.

The actual-expenses regime: the real optimization

By opting for the actual-expenses regime (régime réel), you deduct all of your actual expenses: loan interest, property tax, management fees, insurance, renovation work… And above all, you can apply accounting depreciation to your property and its furniture.

Depreciation is the most powerful mechanism in LMNP: it lets you deduct each year a fraction of the value of your apartment (generally 2 to 3% for the walls) and of your furniture (10 to 20%). On a property bought for €400,000 in Paris, that represents up to €12,000 of deductible expenses per year — without spending a cent. Note: this deduction could be capped from 2027 if the Finance Bill (PLF) is passed as it stands (see our dedicated article).

How do you switch to the actual-expenses regime?

The election is made when you file your income tax return, before February 1 of the current year. You must:

• Report your income using form 2042-C-PRO
• Attach the financial statements (2031 filing package) — which generally requires the services of a chartered accountant specializing in LMNP
• Register as an LMNP with the registry of the commercial court if you haven't already

A specialized chartered accountant costs about €400 to €800 per year — often more than paid back by the tax savings generated.

LMNP and capital gains on resale

One point to be aware of: since the Finance Act for 2025 (Law No. 2025-127 of February 14, 2025), depreciation deducted under LMNP is added back into the calculation of the capital gain on resale, for sales made since February 15, 2025 (excluding serviced residences). Depreciation therefore reduces tax during the rental, but increases the taxable capital gain at the time of sale. The holding-period allowances remain applicable: exemption from income tax after 22 years of ownership, and from social contributions after 30 years (Notaires de France (in French)).

What changed in 2026

Updated October 2, 2026. Two developments are worth watching. First, the add-back of depreciation into the capital gain, already in force (see above). Second, the Finance Bill for 2027, which provides for capping LMNP depreciation at 2.5% and €7,000 per year per tax household: it is a bill, not passed as of today, detailed in our dedicated article. The micro-BIC rules applicable to unclassified tourist furnished rentals have also been tightened: see our article on tourist furnished rental regulations.

In summary

For a Paris apartment worth more than €150,000, the LMNP actual-expenses regime is almost systematically more advantageous than micro-BIC. Setting it up takes a bit of work in the first year but then generates a nearly automatic optimization over several decades.