Professional furnished-property lessor (LMP): micro, actual regime and accounting

Quick answer. A professional furnished-property lessor (LMP) is one whose furnished-rental receipts exceed 23,000 EUR a year and exceed the household's other activity income. This automatic status opens advantages (losses deductible against total income, capital-gains exemption after 5 years) but shifts social contributions to the self-employed regime, heavier than the 17.2 % of the non-professional lessor.

You rent out several furnished properties and your receipts are growing: at a certain threshold, you shift without deciding into the status of professional furnished-property lessor. This status changes everything, from the social regime to capital-gains taxation. This article defines the line between LMP and LMNP, compares micro-BIC with the actual regime, covers VAT and social contributions, and explains why the LMP is sometimes an advantage and sometimes a trap.

The professional furnished-property lessor status is not a choice: it applies automatically once two conditions are met at the same time (CGI art. 155, IV).

First condition: the household's annual furnished-rental receipts exceed 23,000 EUR including all taxes. Second condition: these receipts exceed the household's total other activity income (salaries, BIC, BNC, management remuneration). If both conditions are met, you are LMP. If one is missing, you remain a non-professional furnished-property lessor (LMNP).

Since a decision of the Constitutional Council, registration with the trade register is no longer required for the LMP status. The shift can therefore surprise a lessor unaware they crossed the threshold, for example after retirement reduces their other activity income. This is a point we monitor in our director's wealth support.

Furnished rental falls under industrial and commercial profits (BIC), whether you are LMP or LMNP. Two taxation regimes coexist.

Micro-BIC applies by default in classic furnished rental as long as your receipts stay below 83,600 EUR in 2026, with a flat-rate allowance of 50 % representing your charges (minimum 305 EUR). You are taxed on half of your receipts, without detailed accounting. It is simple, but the allowance replaces any real deduction.

The actual regime becomes relevant once your real charges exceed the 50 % allowance. It allows deducting actual charges (loan interest, property tax, insurance, management fees) and above all depreciating the property and furniture. Depreciation strongly reduces the taxable result, which is why most highly indebted lessors choose the actual regime. This regime requires accounting that we keep in our accounting and review work.

The basic rule often surprises: furnished rental for residential use is VAT-exempt (CGI art. 261 D, 4°). You therefore do not charge VAT on your rents and do not recover VAT on your purchases.

The exception is para-hotel activity. If, in addition to accommodation, you offer at least three of the four para-hotel services (breakfast, regular cleaning of the premises, supply of household linen, reception of guests), your activity becomes subject to VAT at the 10 % accommodation rate, and you then recover VAT on your investments. This distinction between bare furnished rental and para-hotel activity is decisive for tourist residences and short-term serviced rentals, as we explain in our guide on furnished tourist rental and Airbnb.

This is the most misunderstood angle. The non-professional lessor (LMNP) bears on their profits the social levies at the 17.2 % rate. The professional lessor (LMP) falls under the social regime of self-employed workers.

In practice, the LMP's profit bears self-employed social contributions, whose effective rate often sits around 30 to 40 % of net profit, with a minimum contribution due even with a low result. This extra social cost is the counterpart of the status, and it opens rights (pension, allowances). For a heavily depreciated lessor, whose taxable profit is low, the minimum contribution can weigh proportionally heavily. The trade-off must therefore be costed, never endured.

The LMP status also changes the capital-gains regime on sale. In LMNP, the resale falls under personal capital gains, with an allowance for holding period. In LMP, it falls under professional capital gains.

The advantage is the exemption of article 151 septies of the CGI: if you have carried out the activity for at least 5 years and your annual receipts are below 90,000 EUR, the gain is fully exempt from income tax. A tapering exemption applies between 90,000 EUR and 126,000 EUR of receipts. Beware, however: the short-term gain, corresponding to deducted depreciation, remains subject to self-employed social contributions, even when exempt from tax. Benefiting from this exemption deserves a precise analysis of your overall wealth situation.

The LMP's second advantage is the treatment of losses. In LMNP, a loss from furnished rental is only offset against profits of the same nature in the following 10 years. In LMP, the loss (excluding the depreciation part) is offset against the household's total income, with no cap, which can reduce the tax on your other income.

This lever is powerful in the start-up phase, when charges and loan interest exceed rents. It makes the LMP a status sought by some heavily indebted investors, provided they accept the social cost that comes with it.

The LMP status is neither an advantage nor a trap in itself: it all depends on your profile. For a heavily indebted investor in the start-up phase, offsetting losses against total income and the capital-gains exemption after 5 years are real levers, which sometimes justify accepting the social cost.

For an already depreciated lessor, with high taxable profit and moderate receipts, the shift to LMP may instead increase the bill, since self-employed contributions replace the 17.2 % social levies. The main danger is the endured shift: a lessor unaware they crossed the double threshold discovers their new status during an audit, with a contribution recall. Monitoring each year the ratio of furnished receipts to other activity income is therefore the basic reflex.

An investor we support built a portfolio of three furnished flats generating 31,000 EUR of annual receipts. As long as they earned 45,000 EUR of salary, they stayed LMNP: their furnished receipts were below their other activity income. At 60, they reduced their salaried activity to half-time, cutting their salary to 22,000 EUR. Overnight, their furnished receipts of 31,000 EUR exceeded their 22,000 EUR salary and the 23,000 EUR threshold: they shifted automatically to LMP. We anticipated this change 18 months ahead, costed the extra social burden and opted for the actual regime to depreciate the properties and neutralise a large part of the taxable result.