Tax and accounting (LMNP-LMP)

If you own rental property in France, you need to file an annual tax return called “déclaration de revenus”.
Depending on whether your property is a furnished or unfurnished rental, your may need to file more than one return.

If you have furnished rental property, chances are that you have an accountant that takes care of all the administrative procedures for that activity.

However, the return that your accountant files for your furnished rental is not sufficient, you also need to file a personal return, between May and June of each year.

The same goes for unfurnished rental, which needs to be declared each year in a French personal tax return.

Please note that even if your French rental income has been declared in your country of residence, it still needs to be declared in France, and penalties can be added if your returns are late or nonexistent.

Our tax lawyers can help you file your french annual returns.

Wealth tax or “IFI”

If your french real estate property is worth more than 1.3 million euros, you should probably check that you are up to date with your tax returns.

In France, an additional annual tax is paid on the net value of property exceeding 1.300.000 euros.

And when we say “value”, we don’t mean the price that you bought your property for, but an updated market value (i.e. the actual price that you could sell it for, reviewed each year)…

Some liabilities can be deducted, such as property tax (“taxe foncière”) or any outstanding capital on loans attached to the property.

If you are unsure whether you should declare “IFI”, or more generally have any questions on the subject, please don’t hesitate to contact us.

Local taxes : “taxe foncière”, “taxe d’habitation”, etc.

Owning or using property in France also comes with its’ share of local taxes.

“Taxe foncière”, or property tax, is paid annually for any property owned on January the 1st of each period.

“Taxe d’habitation”, or housing tax can also be due if you had the ability to use your property at any time during the year.
This tax does not apply to properties that were rented out during the whole year or on your primary place of residence.

“CFE”, or company real estate contribution is also due if your property is a furnished rental.

When you sell your property, capital gain tax can be retained with different calculations depending on your status.

Our in-house Notary as well as our Tax lawyers are available to assist you for all formalities and questions pertaining to the sale of your French property.

In some rare cases, your furnished or unfurnished rental can be subjected to VAT in France :

• If you rent your flat by commercial lease to an operator (tourism, student accommodation or senior living spaces);
• Or if you offer your flat for rental whilst proposing “parahôtelier” services.

Your VAT returns are filed by your Anderlaine accountant.

Occupancy report or “déclaration d’occupation”

Since 2023, the French tax administration has asked all property owners to file an annual occupancy report to register the status of their property (rented, empty, secondary residence, etc.).

The ” Your 2025 figures to declare ” document lists all the data you’ll need to declare for your 2024 business, classified by heading (from 1 to 6 possible headings depending on the case).

You will therefore need :

1. Tick the items in the ” Your 2025 figures to declare ” document in the list that appears in step 3 of your tax return (income and expenses).
2. Then simply transfer the amounts indicated in the box(es) mentioned in the document ” Your 2025 figures to declare ” to the pages that will open (non-exhaustive example below).

❗Please note that the following example is intended as a guide only. It does not apply to you. For your personal situation, please refer to the document “Your 2025 figures to declare”.

*Please note that some boxes on your declaration are grayed out. To fill them in, click on the little pen next to the box. A window will open on your computer.
You will need to add a line with the information contained in the document “Vos chiffres 2025 à déclarer” (Company name, SIRET, Rental address) and the amount of the box.

2. Your deficits from previous years

A – You have to carry forward Deficits as a non-professional furnished lessor

If you were in a LMNP status in previous years, please bring your 2025 tax notice for 2024 income.

You will find this information in the INFORMATIONS COMPLEMENTAIRES section as in the example below:

If this section is not included on your 2025 tax notice for 2024 income, you do not have any tax losses to carry forward.

If your notice shows amounts in the INFORMATIONS COMPLEMENTAIRES section, Tax Losses on Non-Professional Furnished Lettings, etc., these should be entered in the appropriate boxes, as shown below.

B. You have to carry forward some Non-professional industrial and commercial losses

If you have declared losses in the Other non-professional BIC category, these can be carried forward for 6 years.

You will find this information in the INFORMATIONS COMPLEMENTAIRES section as in the example below:

If this section is not included on your 2025 tax notice for 2024 income, you do not have any tax losses to carry forward.

If your notice shows amounts in the INFORMATIONS COMPLEMENTAIRES section, Non-professional industrial and commercial losses, etc., these should be entered in the appropriate boxes, as shown below..

C – You have to carry forward some global deficits

If you were an LMP and were not taxable on all of your French-source income declared in 2024, then this step concerns you.

These overall losses can be carried forward for 6 years.

You will find this information in the INFORMATIONS COMPLEMENTAIRES.

You will need these amounts when filling in your 2025 tax return in the section of the Charges devoted to CHARGES ET IMPUTATIONS DIVERSES.

Ramped up preliminary declaration requirements

The most significant provision introduced by the anti-Airbnb law is that any owner wishing to rent a property seasonally will first have to declare this via a dedicated online national platform, including having to indicate whether the property is their primary residence. They will then immediately receive an acknowledgment of receipt.
The declared information will be sent to the relevant local authorities and will certainly be used for audits.
In the event the circumstances surrounding the accommodation are modified or changed, the landlord will also have to update their file on the online platform.
We expect to receive more details in a decree.

Cuts to the micro scheme

The anti-Airbnb law has revised downwards the rates and thresholds of the micro regime for seasonal rentals:

• Tax deductions for unclassified accommodations were cut from 50% to 30%, with a cap on turnover set at €15,000;
• Tax deductions for accommodations classified as ‘furnished tourist rentals’ [meublés de tourisme], were cut from 71% to 50%, with a new cap on turnover set at €77,000.

If you exceed these turnover ceilings of €15,000 or €77,000, you will need to switch to the non-presumptive tax regime [régime réel]. However, this does not necessarily involve any disadvantages in terms of taxation of current income for the landlord…

👉In conclusion, there’s no need to panic, renting on Airbnb as an LMNP (loueur en meublé non professionnel [non-professional landlord of furnished accommodations]) is still worth it. However, you do need to set up a non-presumptive (not micro) accounting system, and we can help you with that. Let’s talk about your LMNP accounting

Tightening the noose on energy-inefficient housing

The anti-Airbnb law has also introduced new energy efficiency requirements for tourist accommodations being placed on the market for the first time, a constraint hitherto reserved for residential accommodations:

• Properties with a G rating will not be able to be rented out from 1 January 2025;
• Then, in 2028, properties with an F rating will no longer be able to be rented out;
• And finally, in 2034, properties with an E rating will be subject to this same restriction.

Please note that the only new requirement for properties already being operated as furnished tourist rentals is that they have a D rating by 2034.
As a result, in ten years’ time, only properties with at least a D rating will be able to be rented out seasonally.
Municipalities are responsible for ensuring compliance with these measures and can demand an energy performance certificate (EPC), subject to a penalty of 100 euros per day, and impose a fine of up to 5,000 euros in the event of non-compliance.

Municipalities are responsible for ensuring compliance with these measures and can demand an energy performance certificate (EPC), subject to a penalty of 100 euros per day, and impose a fine of up to 5,000 euros in the event of non-compliance.

Clarification on restrictions in commonhold rules

In order to avoid the vagueness surrounding the scope of residential-use-only clauses, the law also stipulates that commonhold (‘condominium’ in the US) rules adopted after the law enters into force must explicitly state whether seasonal rentals are permitted or prohibited.

A two-thirds majority may make amendments to this effect, as opposed to the unanimous decision required at present.
However, these changes will only be possible in commonholds which already prohibit commercial activity in non-commercial lots.
As a result, unit owners will now have to inform the commonhold association when they file a preliminary declaration to turn the property into a furnished tourist rental. The association will then have to put it on the agenda for the next GM.

More power for municipalities

In addition to a drastic increase in the administrative fines towns can issue, the anti-Airbnb law gives all municipalities, no longer just big cities, free rein to regulate the rental of accommodation to tourists, in particular:

• By allowing them to slash the maximum rental period for a landlord’s primary residence from 120 to 90 days;
• By prohibiting the rental of tourist accommodations in certain districts in their development plans;
• Or introducing seasonal rental authorisation quotas.