LMNP vs LMP: Which Regime Should You Choose for Your Rental Investment in 2026?

Furnished rental has been the star of real estate investment in France for years. It allows you to generate tax-free income over a long period thanks to the depreciation mechanism. But to regulate this commercial activity, the legislator has defined two very distinct statuses: the LMNP (Non-Professional Furnished Rental Company) and the LMP (Professional Furnished Rental Company).

In 2026, the border between these two regimes and their social and fiscal impacts are more complex than ever. Hayot Expertise, a firm specializing in real estate taxation in Paris, offers you a complete analysis to help you make the right choice.

Qualification cannot be chosen à la carte. It is the law which sets the precise criteria. You are automatically considered LMP (Professional) if you cumulatively meet these two conditions:

1. ▸Your gross annual income from furnished rentals exceeds 23,000 including tax per year within the tax household.
2. ▸These revenues exceed all other professional income (salaries, pensions, BIC, BNC, etc.) of the tax household.

If only one of these two conditions is missing, you remain (or become) LMNP (Non-Professional). Registration in the RCS (Trade and Companies Register) is no longer a relevant criterion.

Beware of uncontrolled switching: many investors cross the threshold of €23K in rent at retirement (when salaries fall), becoming de facto LMP without having anticipated it.

The strength of the LMNP and LMP statutes lies in taxation. Furnished rental is not taxed as traditional property income, but in the category of Industrial and Commercial Profits (BIC).

The micro-BIC diet or Real?

For either status, two options are available to you:

• ▸The micro-BIC: If your rents are less than €188,700 (classified tourism) or €83,600 (classic furnished rental). You benefit from a flat-rate reduction of 50% (or even 71%). You are taxed on half of your income, without deducting any real expense. It's simple, but rarely optimized.
• ▸The regime of Reality: This is where the charm operates. You can deduct all your real expenses (loan interest, work, property tax, fees) AND depreciate the value of the property and its furniture. Consequence: you very often lower your tax base to €0.

The power of actual accounting depreciation applies equally to LMNP and LMP.

However, there are notable subtleties about managing deficits:

• ▸The LMNP can carry over its furnished rental deficits only to its other future non-professional furnished rental income (for 10 years). Excess depreciation is carried forward without time limit.
• ▸The LMP enjoys a major advantage: if it generates a regular deficit (thanks to interest and charges, because depreciation alone cannot create a taxable deficit), this deficit is directly deducted from its total income (without limitation of amount), which can generate enormous tax reductions on other sources of household income during the first years of investment.

This is where the sharpest and often feared difference comes into play.

In LMNP (Non-professional) status: You do not pay social security contributions in the literal sense. Profits (if any) come under personal taxation. You are liable for the CSG/CRDS, i.e. social security contributions of around 17.2%. (Exceptions exist, however, for recurring seasonal rentals such as Airbnb generating a certain turnover threshold.)

In LMP (Professional) status: As a "trader", your profits are included in the social security contribution base (SS Independents).

• ▸Overall deduction on average around 35% to 45% on the profit (minimum of around €1200 even in the event of zero results).
• ▸In return for the tax, you validate quarters of retirement.

Taxation on the resale of the property radically distinguishes the Individual investor from the Professional investor.

Resale in LMNP (End of “El Dorado” in 2025): You are subject to the property capital gains regime for individuals. However, the Finance Law 2025 has disrupted this regime: since February 15, 2025, depreciation depreciation deducted during the rental period must be reinstated in the calculation of the taxable capital gain. Fiscal “butter and butter” is no longer relevant. The good news: you retain the benefit of the reductions for the length of ownership, always resulting in a total exemption after 22 years (for IR) and 30 years (for social security contributions).

Resale in LMP (The professional regime): Since you are a professional, the property registered as an asset is subject to the professional capital gains regime (short-term and long-term). However, this is very penalizing: the amount of depreciation recorded must be subtracted from the acquisition price, which massively increases the tax (short-term professional capital gains are taxed as an independent activity with reintegration of social security contributions and the progressive IR scale!). However, a specific exemption for small businesses (Art. 151 septies of the CGI) allows, under very restrictive conditions (more than 5 years of LMP activity and very low turnover thresholds), the exemption of LMP capital gains. A boon for the initiated, but a path strewn with pitfalls.

In 2026, improvisation is no longer permitted in investment real estate. The fine line between these regimes requires long-term mathematical modeling: choice of purchase in one's own name (CGI), dismemberment, investment in SCI subject to IS (or even in Holding).

If you are preparing your LMNP project or the recent crossing of the €23,000 ceiling generates fears, calling on fine real estate expertise is essential.

Hayot Expertise (Paris 8th) supports you from investment simulation, preparation of the furnished rental tax package, resale modeling, up to annual reporting obligations.

📞 Secure your investments today. Contact our LMNP advisors on 01 48 48 24 14 or contact us online to carry out a wealth audit.