Real estate
Your rental income under LMNP
Furnished rental under the actual-expenses regime (régime réel) has a powerful advantage: depreciation of the property is deducted from your rent, and often wipes out tax for years. See what it looks like for you.
Simplified estimate of the LMNP actual-expenses regime. Depreciation of the building estimated at 85% of the price over 30 years (land is not depreciable; furniture and works are not itemised). Deductible expenses: property tax, condominium charges, insurance, management fees, loan interest. Depreciation cannot create a deficit: any surplus is carried forward.
Taxable rental income / year
N/A
Why furnished rental is so effective
With unfurnished rental, your rent is fully taxed. With furnished rental under the actual-expenses regime, you deduct your expenses and the depreciation of the property, an accounting charge that costs you nothing in cash. The result: taxable income often close to zero for many years, so rent collected with almost no tax.
That said, it takes proper bookkeeping, the right depreciation schedule, and planning ahead for resale. It's a formidable regime, provided you're well advised.
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