French investors leverage LMNP rental regime for higher net returns

The Loueur en Meublé Non Professionnel (LMNP) status has become a favourite tool for French savers seeking to diversify their portfolios with rented property. By classifying rental income under the industrial and commercial profits (BIC) regime, investors can choose either the micro‑BIC flat‑rate deduction or the real‑regime that permits full expense deduction and amortisation of the building and its furniture. These mechanisms allow the taxable income from furnished rentals to be largely neutralised, while cash‑flow remains strong. The regime also enables recovery of value‑added tax on purchase price when the property is let furnished, and spreads charges such as loan interest, maintenance and co‑ownership fees over several years. LMNP applies to a wide range of assets—from student studios to senior‑service residences—making it a flexible option for generating supplemental income, preparing retirement or transmitting wealth.