A landlord renting out a furnished studio for the year and another renting their apartment on a short-term platform are not taxed in the same way. Since the finance law for 2024 and the Le Meur law that came into effect on November 21, 2024, the gaps have widened even further.
Understanding these rules helps avoid a tax adjustment or, more simply, choose the right tax regime from the very first declaration of furnished rental income.
DPE and local compliance: the filter before even the tax question
There is a lot of talk about allowances and the BIC regime, but the first barrier in 2024 is not fiscal. In municipalities subject to authorization for a change of use, any new tourist rental in the metropolitan area must be accompanied by a DPE rated from A to E. This threshold will change to A-D on January 1, 2034.
In practical terms, a landlord whose property has an F or G rating can no longer start a furnished tourism activity in these areas. The rule does not apply to long-term rentals or primary residences rented occasionally in certain cases, but it automatically eliminates part of the housing stock.
At the same time, municipalities can now reduce the rental ceiling of a primary residence from 120 to 90 days per year, establish quotas for tourist rentals, and generalize registration procedures. These local constraints directly alter the net profitability of a project, well before the choice between micro-BIC and the real regime. The details of these developments can be found on real estate news on Immo Factory with regular updates on regulatory changes.
Micro-BIC regime for furnished rentals: the new allowance thresholds
The micro-BIC remains the default regime for landlords whose annual income does not exceed the set ceilings. Before 2024, a 50% allowance was applied for standard furnished rentals and 71% for classified tourist rentals. The finance law for 2024 has significantly changed this framework for tourist rentals.
What changes for unclassified tourist rentals
The allowance for unclassified tourist rentals drops to 30%. The taxable base therefore mechanically increases for landlords who rented through platforms without having their property classified. A landlord receiving 20,000 euros in rent previously only deducted half. With the new allowance, the amount subject to income tax rises from 10,000 to 14,000 euros.
The case of classified rentals and rural areas
For classified tourist rentals, the allowance can remain at 71% in certain areas, but geographical restrictions apply. Properties located in rural areas retain a tax advantage, creating a new segmentation between tourist urban centers and less pressured territories.
Long-term furnished rentals (tenant’s primary residence) retain their 50% allowance under the revenue ceiling of 77,700 euros. For an LMNP landlord renting year-round, the calculation remains unchanged.
Real BIC regime: when expenses exceed the flat-rate allowance
The real taxation regime allows for the deduction of actual expenses: loan interest, maintenance work, property tax, management fees, insurance premiums, depreciation of the property and furniture. This regime becomes particularly relevant when expenses represent more than 50% of rental income, which is common in the early years of an investment with a loan.
Here are the main deductible items under the real regime:
- Loan interest and bank fees related to the acquisition of the furnished property
- Accounting depreciation of the building (excluding land) and furniture, which can generate a tax result close to zero for several years
- Current expenses: property tax, non-occupying owner insurance, accounting fees, rental management fees
- Maintenance and repair work (but not expansion work)
The real regime requires rigorous accounting and, in most cases, the assistance of an accountant. The cost of this support is itself deductible, which mitigates the additional burden.
LMNP or LMP status: impact on the taxation of rental income
The distinction between non-professional furnished rental and professional furnished rental does not depend on the type of property, but on two cumulative criteria. One is considered LMP when furnished rental income exceeds 23,000 euros per year and exceeds other income from the household’s activity.
In LMNP, deficits can only be offset against income of the same nature (furnished rental BIC) and can be carried forward for ten years. In LMP, the deficit offsets the overall income, which can significantly reduce the tax of a household with high salary income. In return, LMP leads to contributions to social security for the self-employed, a cost that many landlords underestimate.
Transitioning from LMNP status to LMP status can also have consequences on the capital gains upon resale. In LMP, the capital gain falls under the professional capital gains regime, with a possible exemption after five years of activity subject to revenue conditions. Returns vary on this point depending on the asset situation, and accounting support is still recommended before any change of status.
Co-ownership and tourist rentals: an often-overlooked angle
The Le Meur law introduced an obligation to inform the property manager when a landlord declares a tourist rental. The general assembly of co-owners can now, in certain cases, prohibit tourist rentals in the building, particularly in the presence of an exclusive bourgeois housing clause in the co-ownership regulations.
This dimension goes beyond pure taxation but directly impacts the viability of a project. An investor who buys a unit in co-ownership for tourist rentals without checking the co-ownership regulations and the position of the property manager takes a concrete patrimonial risk.
The taxation of furnished rental income in 2024 is no longer just a choice between micro-BIC and the real regime. Between the new allowance thresholds, DPE constraints, the expanded powers of municipalities, and co-ownership rules, each project requires a cross-analysis even before the first income declaration.
