The Choice That Defines Your Tax Bill
Every furnished rental landlord must operate under one of two tax computation regimes: the micro-BIC (a flat allowance on gross receipts) or the régime réel (actual deductible charges including depreciation). This choice — sometimes forced, sometimes elected — is the single most important tax decision a meublé landlord makes. Getting it wrong can mean paying thousands of euros in unnecessary tax every year.
The January 2025 reform dramatically changed the landscape by cutting the micro-BIC threshold and allowance for unclassified tourist meublé, forcing a large number of Airbnb-type landlords into régime réel. Understanding the new thresholds and the logic of each regime is now more important than ever.
The Micro-BIC Regime: How It Works
Under micro-BIC, the landlord applies a flat allowance (abattement forfaitaire) to their gross rental receipts and pays income tax on the remainder. No accounting is required, no expenses need to be documented, and no annual accounts need to be filed. The tax return requires only the declaration of gross receipts — the tax authority applies the allowance automatically.
| Rental type | Threshold (2025) | Allowance | Depreciation allowed? |
|---|---|---|---|
| Long-term furnished (primary residence) | €77,700 | 50% | No |
| Classified tourist meublé (1–5 stars Atout France) | €77,700 | 50% | No |
| Unclassified tourist meublé (Airbnb, Booking.com etc.) | €15,000 | 30% | No |
| Régime réel (above threshold OR by election) | No upper limit | Actual charges + amortissement | Yes |
The Régime Réel: Actual Charges and Depreciation
Under régime réel, the landlord deducts all actual charges from gross rental receipts and pays income tax on the net result. Deductible charges include: mortgage interest, property management fees, insurance, taxe foncière, CFE, repairs and maintenance, accountancy fees, and — critically — annual depreciation (amortissement) of the building and its fixtures and fittings.
Amortissement is the transformative element of régime réel. A building may be depreciated over 20–40 years, with fittings and furniture depreciated separately over shorter periods (5–15 years). For a €300,000 property (excluding land, which cannot be depreciated), annual depreciation could be €7,500–€12,000 per year. Combined with other charges, this routinely reduces taxable income to zero — meaning the landlord pays no income tax on the rental income for many years.
The 2025 Reform: What Changed
The January 2025 reform (loi de finances 2024 rectificative) fundamentally changed the micro-BIC regime for unclassified tourist meublé. Before January 2025, all meublé landlords — regardless of rental type — benefited from the €77,700 threshold with a 50% allowance. The reform introduced a radical reduction for unclassified tourist meublé and a modest change for classified tourist meublé.
- Threshold: €77,700
- Allowance: 50%
- Most Airbnb landlords comfortably below threshold
- Micro-BIC widely used and tax-efficient
- Threshold: €15,000
- Allowance: 30%
- Landlords above €15,000 now in régime réel
- French accountant required above €15,000
- Threshold: €77,700 (unchanged)
- Allowance: 50% (reduced from 71%)
- Classification via Atout France now financially decisive
- Tax saving vs unclassified: substantial
Electing Régime Réel Below the Threshold
A landlord whose receipts are below the applicable micro-BIC threshold can still elect régime réel. This election is made on the income tax return and binds the landlord for 2 years (renewable). It makes sense when actual charges plus depreciation exceed the flat allowance percentage — which is common for landlords who have a mortgage, have recently acquired the property, or own a high-value property with significant annual depreciation.
The election must be made before the filing deadline for the tax year to which it relates. Once made, the landlord cannot revert to micro-BIC for 2 years. Given the complexity of régime réel, a French accountant is practically essential — but their fees are themselves deductible.
From 1 January 2025, LMNP landlords who later sell a property they have depreciated under régime réel must reinstate all cumulative amortissement when calculating the capital gain (CGI Art. 150 VC as amended). This increases the taxable gain significantly. Landlords considering régime réel election should model the full acquisition-to-sale cycle — not just the annual tax savings — before making a decision. The combination of lower annual tax under régime réel and higher capital gains tax on exit must be weighed carefully, especially for properties held for less than 15–20 years.
- Micro-BIC flat allowances (CGI Art. 50-0): 50% for long-term meublé (threshold €77,700) and classified tourist meublé (threshold €77,700); 30% for unclassified tourist meublé (threshold €15,000 from January 2025). No accounting required below threshold. Income tax applied only to the portion not covered by the allowance.
- 2025 reform (loi de finances rectificative 2024): unclassified tourist meublé threshold cut from €77,700 to €15,000; allowance cut from 50% to 30%. Classified tourist meublé: threshold unchanged at €77,700 but allowance reduced from 71% to 50%. Most Airbnb landlords above €15,000 are now forced into régime réel and must file annual accounts with a French accountant.
- Régime réel amortissement (CGI Art. 39 C — Quilichini): deducts actual charges including mortgage interest, insurance, taxe foncière, repairs, management fees, and annual depreciation. Building depreciated over 20–40 years; furniture and fittings over 5–15 years. For a €300,000 property, annual depreciation alone can be €7,500–€12,000 — routinely reducing taxable BIC income to near-zero.
- Electing régime réel below threshold: landlords below the applicable threshold can elect régime réel when actual charges + depreciation exceed the flat allowance percentage. Election binds for 2 years (renewable). Must be made before the tax filing deadline. A French accountant is practically essential but their fees are deductible.
- 2025 LMNP capital gains change (CGI Art. 150 VC amended): cumulative amortissement deducted under régime réel must be reinstated when calculating capital gains on sale — significantly increasing the taxable gain. The full acquisition-to-sale tax cycle must be modelled before making a régime réel election, especially for properties held less than 15–20 years.
Our English-speaking French lawyers and tax advisers provide precise micro-BIC vs régime réel analysis for non-resident meublé landlords, including modelling the full acquisition-to-sale tax cycle and the 2025 capital gains implications.
Request a Tax AnalysisThis article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Tax rules are subject to annual change — always seek qualified French legal and tax advice. The comparison tool provides indicative estimates only and is not a substitute for professional tax advice.
Key Legal References
Micro-BIC regime: flat allowance on gross receipts; 50% for long-term and classified (threshold €77,700); 30% for unclassified (threshold €15,000 from 2025)
Régime réel: actual charge deduction including mortgage interest, insurance, taxe foncière, management fees, accountancy, repairs
Amortissement (Quilichini): annual depreciation deduction of building (20–40 years) and fixtures/fittings (5–15 years)
2025 reform: unclassified tourist meublé threshold cut from €77,700 to €15,000; allowance cut from 50% to 30%; classified tourist meublé allowance cut from 71% to 50%
LMNP capital gains 2025: cumulative amortissement must be reinstated in capital gains calculation on sale
