Furnished rental tax status in Nice: understanding LMNP taxation

Whether you rent by the year or short-term, a furnished property in Nice most often falls under the LMNP status (non-professional furnished lessor). This tax status is one of the most favorable for a rental investor, provided you understand how it works.

What is the LMNP status?

LMNP applies whenever you rent out a furnished property without this activity being your main profession, under certain income thresholds. Income is then taxed under the BIC category rather than as property income, which allows for more favorable calculation rules.

Micro-BIC or actual expenses regime: which to choose?

The micro-BIC regime applies a flat-rate allowance on declared income — simple to manage, but sometimes less advantageous if your actual expenses (loan, works, management, depreciation) are high.

The actual expenses regime allows you to deduct all costs related to the property and, above all, to apply accounting depreciation to the property and furniture. For a recent investment with an ongoing loan, this regime often results in very low, or even zero, taxation for several years.

Depreciation, a powerful tax lever

Depreciation involves deducting a portion of the value of the property and furniture each year, with no actual cash outflow. Combined with loan interest and management costs (including the concierge commission), it often neutralizes a large part of taxable income.

LMNP and short-term rental in Nice

Since short-term rental is furnished by nature, it fits naturally within this tax framework. Concierge, cleaning, and rental management fees are deductible expenses under the actual expenses regime, which reduces the taxable base of your rental income accordingly.

This article presents the general principles of LMNP; thresholds, rates, and rules change regularly and depend on your personal situation. Support from an accountant is recommended to optimize your tax return.