Micro-BIC vs régime réel: which costs less for your LMNP furnished rental in France?

Micro-BIC or régime réel for a French furnished rental: since 2025 income, an unclassified furnished holiday let only gets a 30% flat allowance, up to €15,000 of receipts. In three of our four worked cases, the real regime brings taxable income down to between €0 and €2,700, against €8,400 to €11,400 under micro-BIC. The fourth case, a classified studio sold after six years, favours micro-BIC.

Micro-BIC vs régime réel: what the Loi Le Meur changed for furnished rentals in France

The Loi Le Meur of 19 November 2024 (law no. 2024-1039, article 7) cut the tax advantage of furnished holiday lets from income received in 2025. Under micro-BIC, the tax office deducts a flat allowance from your receipts and taxes the rest. No actual expense is deducted: the allowance stands for all of them. The régime réel (real regime) taxes the difference between your receipts and your actual expenses, depreciation included.

• Basis: the ceiling applies to total receipts collected, rent and recharged costs included.
• Exceeding the ceiling: in the 1st or 2nd year above the ceiling, micro-BIC still applies for one more year. After that, the real regime is mandatory.
• Classified holiday let: classification is optional, rated 1 to 5 stars, and valid for five years. It changes none of the other obligations (registration, change of use, night cap).

The non-tax rules of the Loi Le Meur, region by region, are summarised on our page legal framework by region.

How the real regime works for a French furnished rental, depreciation included

Under the real regime, you deduct the costs incurred for the rental: mortgage interest, service charges, property tax (taxe foncière), insurance, management fees, accountant's fees. You also deduct depreciation (amortissement): each year, a share of the price of the property and furniture, as if they lost value through use. A €176,000 building (land excluded) depreciated over 30 years gives €5,867 of deductible cost a year, with no cash going out.

• Land is not depreciated: you split the price between land and building, on your own responsibility. The notarial deed normally gives this split.
• Depreciation cannot create a loss: it is deductible up to rent minus other costs (article 39 C of the French tax code). The undeducted part is carried forward to later years, within the same limit.
• Loss before depreciation: if costs exceed receipts, the loss is offset against non-professional furnished rental income of the same year and the following 10 years.
• Obligations: compliant bookkeeping, form 2031 and its schedules by the 2nd working day of May, result reported in box 5NA of your income tax return.
• Election: below the ceilings, you elect for the real regime before the filing deadline of the previous year's return. The election then renews each year.

Four worked cases: micro-BIC or the real regime

Common assumptions, to adapt to your situation:

• French tax household in the 30% income tax band, with salaries above rental receipts: you remain a non-professional furnished landlord (LMNP).
• Social charges of 18.6% on furnished rental income. Each €1,000 of taxable income therefore costs €486.
• Land: 20% of the property price. Building depreciated over 30 years, furniture over 7 years.
• Management delegated at 20% of receipts, cleaning included (cases 1 to 3). Accountant: €600 a year under the real regime.
• Illustrative figures, rounded to the euro. They describe no real property.

Case 1: Nice studio, unclassified holiday let, €12,000 of receipts

Costs: management €2,400, service charges €1,500, property tax €900, utilities and internet €900, accountant €600, insurance €200. That leaves €5,500 to absorb €6,867 of depreciation (€5,867 building, €1,000 furniture). Taxable income falls to €0 and €1,367 is carried forward. Under micro-BIC at 30%, taxable income would be €8,400.

Case 2: Nice one-bedroom, €22,000 of receipts two years running

Above €15,000 two years running, micro-BIC for unclassified lets is closed. Classification reopens micro-BIC at 50%, giving €11,000 of taxable income. The real regime gives €2,688: €22,000 of receipts, minus €9,350 of costs (management €4,400, service charges €1,800, utilities €1,200, property tax €1,100, accountant €600, insurance €250), minus €9,962 of depreciation. Watch the €23,000 threshold: above it, a holiday let landlord must register with the self-employed social security scheme, even while remaining non-professional for income tax.

Case 3: Paris one-bedroom on a bail mobilité, bought with a mortgage

A bail mobilité (mobility lease, 1 to 10 months) counts as long-term furnished rental: 50% allowance under micro-BIC, giving €11,400 of taxable income. Under the real regime, mortgage interest (€9,000 in this example) and other costs leave €4,690 for depreciation. Taxable income is nil and €7,939 of depreciation joins the carried-forward stock, useful in years when interest falls. The Paris short-let rules are covered in the Loi Le Meur in Paris.

Case 4: classified Menton studio, low costs, sale planned after six years

Costs: cleaning and linen by a contractor €1,600, service charges €1,200, utilities €900, property tax €700, accountant €600, insurance €200. The real regime saves €1,633 of taxable income a year, or €794 of tax. That yearly saving has to be weighed against the cost at resale, worked out in the next section.

Selling an LMNP property under the real regime: depreciation added back to the capital gain

For sales completed since 15 February 2025 (2025 Finance Act, article 84), depreciation deducted under the real regime is added back to the capital gain, before the taper relief for length of ownership. Under micro-BIC, nothing is added back. Some properties in serviced residences (student, senior and disability housing) are excluded. The gain is still taxed at 19% income tax and 17.2% social charges, with exemption after 22 years of ownership for income tax and 30 years for social charges.

Calculation for case 4, sold at the same price under both regimes, after six years of ownership:

1. Building depreciation deducted over six years: €88,000 ÷ 30 × 6 = €17,600, added to the gain.
2. Income tax: 6% relief for the 6th year, so €17,600 × 94% × 19% = €3,143.
3. Social charges: 1.65% relief, so €17,600 × 98.35% × 17.2% = €2,977.
4. Cost at resale under the real regime: €6,120, excluding the surcharge on gains above €50,000.
5. Cumulative saving from the real regime over six years: €794 × 6 = €4,764.
6. Net result: micro-BIC leaves the case 4 owner €1,356 better off.

For cases 1 to 3, the yearly saving from the real regime (€4,040 to €5,540) comfortably covers the add-back. The gap narrows when micro-BIC taxable income is already low, or when the sale is close.

Micro-BIC or régime réel: a six-step method to decide

1. Classify your rental: unclassified holiday let, classified holiday let, or long-term (furnished lease, bail mobilité).
2. Note your receipts for the last two years and compare them with the ceiling for that category.
3. List your actual costs over 12 months, from your management, service charge and loan statements.
4. Work out depreciation: price excluding land divided by the chosen period, furniture separately.
5. Compare the two taxable incomes, then multiply the gap by your income tax band plus 18.6%.
6. Factor in when you plan to sell: building depreciation times the number of years, against the cumulative saving.

The receipts range for step 2 can be estimated with the method in our article what a short-let property earns. In Nice, choosing between holiday stays and a bail mobilité also changes the tax category: see Nice's 120-day cap and the bail mobilité.

What Flatlab does

We manage properties in Paris, Nice and on the Côte d'Azur, as short lets and on a bail mobilité. Our fee is 20% all-inclusive: housekeeping, linen, maintenance and distribution are included, with 3-month cancellation. Every euro received and every expense incurred appears in a detailed monthly report, the basis for the costs your accountant deducts under the real regime. Details of the offer are on our owner management page.

FAQ

What is the micro-BIC allowance for an unclassified holiday let in 2026?

30%, up to €15,000 of annual receipts. That ceiling is unchanged for 2026 income, while the ceiling for classified lets and long-term furnished rentals rises to €83,600.

When should an LMNP landlord elect for the real regime?

Before the filing deadline of the previous year's return. For 2027 income, the election must therefore be made before the filing deadline for 2026 income, in spring 2027.

Can LMNP depreciation create a tax loss?

No. It is deductible up to rent minus other costs. The excess is carried forward to later years, within the same limit.

Is getting a furnished holiday let classified worth it?

Under micro-BIC, it raises the allowance from 30% to 50% and the ceiling from €15,000 to €77,700 (€83,600 for 2026). Under the real regime, it does not change taxable income.

This article is for information only. It does not replace professional tax advice. The figures in the four cases are illustrative: have your calculation checked by a chartered accountant before making the election.