Which tax regime should you choose for your furnished rental in 2026?

Furnished rentals in France are classified as industrial and commercial profits (BIC) and offer you a choice between two main tax regimes: the Micro-BIC, which provides a 50% flat-rate deduction, or the "régime réel" (actual cost regime), which allows you to deduct your actual expenses and depreciate your property. Your choice depends on three factors: the amount of your annual revenue (up to a €77,700 threshold), the level of your deductible expenses, and your status (LMNP or LMP).

At Welkeys, we support our owners through this process: we provide all the necessary documentation for your tax return (annual income summary, invoices for deductible services) and connect you with accountants specializing in furnished rentals to optimize your tax situation from the start.

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Understanding the two tax statuses for furnished rentals

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LMNP: Non-professional furnished rental status

You are automatically classified as LMNP if your furnished rental income remains below €23,000 per year, or if it represents less than half of your household's total annual income. This status applies to the majority of owners who rent out one or two furnished properties.

LMNP requirements:

• Annual revenue under €23,000, OR
• Furnished rental income < 50% of total household income

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LMP: Professional furnished rental status

The LMP status applies when your rental income exceeds €23,000 annually AND represents more than half of your total income. This status offers certain tax advantages but entails additional social security obligations.

LMP requirements:

• Annual revenue over €23,000, AND
• Furnished rental income > 50% of total household income
• Registration with the RCS (Trade and Companies Register)

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Tax differences between LMNP and LMP:

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The Micro-BIC regime: simplicity and flat-rate deduction

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How Micro-BIC works

The Micro-BIC regime applies by default when your annual furnished rental revenue does not exceed €77,700. The tax authorities automatically apply a 50% flat-rate deduction to your reported income.

Practical example:

• Rental income: €30,000
• Flat-rate deduction: €15,000 (50%)
• Taxable base: €15,000
• Income tax: based on your marginal tax bracket
• Social contributions: €2,580 (17.2% of €15,000)

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Advantages of Micro-BIC

Administrative simplicity: You only report your revenue on the 2042-C-PRO supplementary tax form. No detailed accounting is required.

No accounting fees: The return can be filed without accounting assistance, which represents a savings of €500 to €1,500 per year.

Ideal for small rental incomes: If your actual expenses are low, the 50% flat-rate deduction is often more advantageous than deducting actual expenses.

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Limitations of the Micro-BIC regime

The Micro-BIC regime becomes disadvantageous when:

• Your actual expenses exceed 50% of your rental income
• You have taken out a loan to purchase the property (loan interest is not deductible)
• You are carrying out major renovations
• You pay for an Airbnb concierge service (fees are not deductible under Micro-BIC)

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➝ Quickly estimate your income

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The Real Regime: expense deduction and depreciation

How the Real Regime works

The Real Regime allows you to deduct all of your actual expenses and depreciate your property and furniture. You must voluntarily opt for this regime if your revenue is below €77,700, or you are automatically subject to it above this threshold.

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Deductible expenses under the Real Regime

Operating expenses:

• Property tax
• Home insurance
• Rental management and concierge fees
• Condominium fees
• Supplies and consumables
• Communication costs (listings, website)

Exceptional expenses:

• Repair and maintenance work
• Notary fees and registration duties
• Accounting fees
• Bank charges

Financial expenses:

• Mortgage interest
• Loan application fees and borrower insurance
• Overdraft interest related to the activity

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Depreciation: the major advantage of the Real Regime

Depreciation allows you to deduct a portion of the value of your property and equipment each year, without any actual cash outflow.

Applicable depreciation periods:

• Building structure: 25 to 40 years
• Facade and roof: 15 to 25 years
• Electrical and plumbing installation: 10 to 15 years
• Furniture and appliances: 5 to 10 years
• Linens and tableware: 5 years

Depreciation example:

Apartment purchased for €200,000 (€150,000 for construction and €50,000 for land)

• Land: non-depreciable Construction: €150,000 depreciated over 30 years = €5,000/year Furniture: €15,000 depreciated over 7 years = €2,143/year Total annual depreciation: €7,143

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Simplified real tax regime vs. standard real tax regime

Simplified real tax regime (revenue < €840,000):

• Simplified 2031 tax return Simplified balance sheet and income statement Cash-basis accounting permitted

Standard real tax regime (revenue > €840,000):

• Full tax return package Accrual-basis accounting mandatory Certified accountant strongly recommended

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Micro-BIC or real tax regime: how to choose?

Comparative calculation for an apartment in Lyon

Assumption: Studio rented as a furnished vacation rental, 45 m², Lyon 3rd arrondissement

Annual rental income: €18,000

Annual expenses:

• Property tax: €850 Insurance: €240 Condominium fees: €1,200 Airbnb concierge service (20% of revenue): €3,600 Cleaning and consumables: €1,800 Supplies and linens: €600 Internet and electricity: €480 Maintenance work: €800 Certified accountant: €900 Loan interest: €2,400 Total actual expenses: €12,870

Depreciation:

• Real estate (construction value €120,000): €4,000/year Furniture and equipment (€12,000): €1,714/year Total depreciation: €5,714

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Tax comparison

Under Micro-BIC:

• Reported income: €18,000 Standard deduction (50%): €9,000 Taxable base: €9,000 Income tax (30% marginal tax rate): €2,700 Social charges (17.2%): €1,548 Total tax burden: €4,248

Under the real tax regime:

• Reported income: €18,000 Deductible expenses: €12,870 Depreciation: €5,714 Taxable result: -€584 (loss) Income tax: €0 Social charges (17.2% on income): €0 Total tax burden: €0 Tax savings: €4,248 Cost of certified accountant: €900 Net gain: €3,348

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The 3 decision criteria

1. Level of actual expenses

Choose the actual expense regime if:

• Your actual expenses > 50% of your rental income
• You have an outstanding loan
• You use an Airbnb concierge service

Stay with Micro-BIC if:

• Your actual expenses < 40% of your rental income
• The property is paid for in full
• You manage the rental yourself

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2. Type of rental

Short-term rental / Airbnb: The actual expense regime quickly becomes more advantageous due to high costs (concierge services, frequent cleaning, supplies).

Long-term rental: The Micro-BIC regime may be sufficient if expenses are low and the property is paid for in full.

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3. Investment horizon

Short term (< 5 years): The Micro-BIC regime may be suitable if you plan to resell quickly.

Long term (> 5 years): The actual expense regime allows you to accumulate depreciation that will reduce the taxable capital gain upon resale.

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Specifics of classified furnished tourist accommodation

Classified furnished tourist accommodations benefit from an increased 71% allowance under the Micro-BIC regime (instead of 50%). The revenue threshold is also raised to €188,700.

To obtain classification:

• Meet comfort and equipment criteria
• Apply for classification through Atout France
• Cost: approximately €150 for 5 years

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➝ Entrust your property to Welkeys

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Welkeys: your tax partner for furnished rentals

Choosing the right tax regime is a major financial decision, but it shouldn't make you lose sight of what matters most: generating steady rental income with a maximum occupancy rate.

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Why entrust your property to Welkeys from the start

Guaranteed income, simplified taxation

With Welkeys, you delegate 100% of the management of your furnished rental:

• Booking management and guest communication: our team manages listings on Airbnb, Booking.com, and other platforms Full welcome service: arrivals, departures, and key handovers 7 days a week Professional cleaning after every departure: linens, consumables, and quality control 24/7 guest support: our concierge service handles all requests Upkeep and maintenance: rapid response in case of issues

Result: You receive your monthly rental income without any management constraints.

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Welkeys and the "régime réel" tax scheme: the winning duo

Our concierge fees are fully tax-deductible under the "régime réel" scheme. Here is how it works for an apartment managed by Welkeys:

Example: 40 m² studio in Bordeaux

Without Welkeys - Self-managed:

• Rental income (70% occupancy): €15,000 Time spent: 15 to 25 hours per week Limited deductible expenses: €3,500 Taxable base under "régime réel": €11,500 Tax (30% marginal tax rate) + social contributions: €4,002

With Welkeys - Managed by us:

• Rental income (85% occupancy): €19,500 Welkeys fees (20%): €3,900 (deductible) Other deductible expenses: €4,200 Depreciation: €4,500 Taxable profit: €6,900 Tax (30% marginal tax rate) + social contributions: €2,403 Time spent: 0 hours

Gain with Welkeys:

• Net income after taxes: +€2,895 Time saved: 780 to 1,300 hours per year Occupancy rate: +15 points

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Welkeys supports you with your tax requirements

Complete documentation for your tax return:

• Annual summary of rental income Monthly breakdown of bookings Invoices for our services for tax deduction Guidance for your 2042-C-PRO tax return

Connection with specialized accountants:

Welkeys works with a network of accountants specializing in furnished rentals who are fully familiar with the specifics of concierge operations and can assist you with:

• Choosing the most advantageous tax scheme Optimizing your deductions Managing your depreciation Your annual tax return

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How to switch from one tax scheme to another

Switching from Micro-BIC to the actual earnings tax regime

Procedure:

1. Submit an election for the actual earnings regime before February 1st of year N
2. The election applies to income for year N
3. The election is valid for a minimum of 2 years

Form to use: Letter of election for the actual earnings regime to be sent to the Business Tax Service (SIE) responsible for your property.

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Letter template:

[Your contact information]

To [Name of SIE]

[Address of SIE]

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Subject: Election for the actual earnings tax regime

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Madame, Monsieur,

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I, the undersigned [First and Last Name], residing at [address], operating as a non-professional furnished rental landlord under SIRET number [number], wish to opt for the actual earnings tax regime starting from the year [year].

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Je vous prie d'agréer, Madame, Monsieur, l'expression de mes salutations distinguées.

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Date and signature

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Switching back to Micro-BIC from the actual earnings regime

You can switch back to Micro-BIC:

• After a minimum of 2 years in the actual earnings regime
• If your revenue falls back below the €77,700 threshold
• By simple request before February 1st

Note: If you return to Micro-BIC, you must reintegrate the depreciation deducted during the resale of the property, which increases the taxable capital gain.

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Tax filing: practical steps for 2026

Filing under Micro-BIC

Form: 2042-C-PRO (supplementary declaration)

Box to fill in:

• 5ND: Non-professional furnished rental income (standard)
• 5NG: Non-professional furnished rental income (classified tourist accommodation)

Documents to keep:

• Rental agreements or Airbnb T&Cs
• Annual income summary (provided by Welkeys)
• Proof of income (bank statements)

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Reporting under the actual regime (régime réel)

Forms:

• 2031: Simplified balance sheet
• 2033-A to 2033-G: Appendices
• 2042-C-PRO: Reporting the result

Required documents:

• Complete accounting records (journal, general ledger)
• Amortization schedule
• Supporting documents for all expenses
• Bank statements
• Invoices for renovations, equipment, and management fees

Accountant assistance: Highly recommended to avoid errors. Budget: €600 to €1,500 depending on complexity.

2026 Deadlines

• Online filing: between mid-April and early June 2026 (exact dates to be confirmed)
• Option for the actual regime: before February 1, 2026
• Form 2031 (actual regime): before the 2nd business day following May 1, 2026

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FAQ: Your questions about furnished rental taxation

Can I change my tax regime every year?

No. If you opt for the actual regime, you are committed for at least 2 years. Under the Micro-BIC regime, you can opt for the actual regime at any time before February 1.

Are Airbnb concierge fees deductible under the Micro-BIC regime?

No. Under the Micro-BIC regime, no expenses are individually deductible. You receive a flat-rate 50% allowance intended to cover all your expenses. Concierge fees are only deductible under the actual regime.

What happens if I exceed the €77,700 threshold during the year?

If you exceed the threshold in year N, you remain under the Micro-BIC regime for that year. If you exceed the threshold again in year N+1, you will automatically switch to the actual regime starting in year N+1.

How do I report a loss under the actual regime?

For LMNP, losses can be carried forward against BIC income for the following 10 years. They cannot be deducted from your total household income. For LMP, losses can be deducted from your total household income.

Do I need to report my Airbnb income if I earn less than €77,700?

Yes, absolutely. All furnished rental income must be reported, regardless of the amount. Failure to report constitutes tax evasion and is subject to fines.

Is the residence tax on short-term furnished rentals tax-deductible?

Yes, but only under the actual cost regime (régime réel). The residence tax on secondary residences (which applies to short-term furnished rentals) is deductible in the same way as property tax.

How do I calculate my rental income if I list on multiple platforms?

You must add up all income received from Airbnb, Booking.com, Abritel, and other platforms. Keep the annual summaries from each platform. With Welkeys, you receive a comprehensive summary document.

Does depreciation decrease the value of my property?

No, depreciation is an accounting entry that does not affect the actual market value of your property. However, the depreciation deducted will increase your taxable capital gain upon resale (recapture of depreciation).

Can I combine LMNP status with a salaried job?

Yes, LMNP status is perfectly compatible with salaried employment. Your furnished rental income is taxed under the BIC category, which is separate from your salary income (wages and salaries).

How are capital gains taxed when selling an LMNP property?

Capital gains are subject to the private real estate capital gains tax regime: 19% income tax + 17.2% social charges, with a reduction based on the holding period (total exemption after 30 years). Note: the depreciation deducted is added back into the capital gain calculation.

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Conclusion: Plan ahead to win

The choice of tax regime for your furnished rental directly impacts your net profitability. While the Micro-BIC regime is attractive for its simplicity, the actual cost regime quickly becomes more advantageous once you have significant expenses, a mortgage, or if you delegate management to a property management service like Welkeys.

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Our recommendation:

• Micro-BIC: for a property paid in full, rented long-term, managed independently, with low expenses
• Actual cost regime: for a property financed with a loan, rented short-term, managed by a professional agency, or requiring regular maintenance

Whatever your situation, simulate both options by taking your actual expenses and future plans into account. An accountant specializing in furnished rentals can assist you with this decision for a few hundred euros—an investment that often pays for itself in the first year.

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Ready to delegate your furnished rental and maximize your income?

➝ Entrust your property to Welkeys

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