The rents received by a landlord are subject to income tax and social contributions. The applicable tax category, property income or industrial and commercial profits (BIC), directly depends on the type of rental: unfurnished or furnished. This distinction determines the tax regime, available deductions, and deductible expenses.
Social contributions on rents: the often underestimated tax burden
Beyond income tax, rental income is subject to social contributions at a rate of 17.2%. This rate applies to both property income (unfurnished rental) and BIC (furnished rental), after deductions or expense deductions according to the chosen regime.
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A portion of the CSG paid on this income is deductible from the global income the following year, up to 6.8%. This deduction is only possible for income subject to the progressive scale, not for those subject to a flat-rate withholding.
To learn more about the taxation of rental income in France, the distinction between social contributions and income tax is the first reflex to adopt before any simulation.
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Micro-property regime and real regime: unfurnished rental
A vacant rental property generates property income. Two regimes coexist, and the choice between the two significantly alters the taxable base.
The micro-property regime and its 30% deduction
The micro-property regime automatically applies when the household’s annual gross rents remain below the threshold of 15,000 euros. The administration then applies a flat-rate deduction of 30% on the declared rents. No actual expenses can be deducted in parallel.
This regime is suitable for landlords whose annual expenses (repairs, loan interest, insurance, property tax) represent less than 30% of the rents received. Beyond that, the real regime becomes more advantageous.
The real regime: deducting each expense
Under the real regime, the landlord declares their gross rents and then subtracts all the actual expenses incurred. The main deductible expenses are:
- Loan interest related to the acquisition or renovation of the rental property, including bank processing fees
- Repair, maintenance, and improvement expenses (excluding expansion or reconstruction)
- Property tax (excluding waste disposal), insurance premiums, and rental management fees
When expenses exceed rents, the generated property deficit is deductible from global income up to a limit of 10,700 euros per year. The surplus can be carried forward to the property income for the next ten years. Choosing the real regime commits the landlord for a minimum duration of three years.
Micro-BIC and real BIC regime: furnished rental
A furnished rental property falls under the category of industrial and commercial profits. The landlord is then considered a furnished rental provider, either professional (LMP) or non-professional (LMNP), depending on the amount of their receipts and their share in the household income.
Micro-BIC for standard furnished rentals
The micro-BIC regime grants a flat-rate deduction of 50% on rental receipts, as long as they do not exceed the regulatory ceiling. The declaration is limited to reporting the gross amount of rents received.
Reform of non-classified tourist rentals
Since the so-called Le Meur law of February 15, 2025, non-classified tourist rentals like Airbnb are subject to a stricter regime. The revenue ceiling to benefit from micro-BIC has been tightened to around 15,000 euros, and the flat-rate deduction has been reduced to 30%, effectively aligning their taxation with that of standard unfurnished rentals.
Classified tourist rentals retain a more favorable deduction. This distinction prompts many landlords to reconsider their strategy: converting a property to an unclassified short-term rental no longer serves as a tax optimization lever.
Depreciation in the real BIC regime
The real BIC regime offers an advantage absent in property: the possibility to depreciate the real estate, furniture, and renovations. Depreciation reduces taxable profit without cash outflow, which can bring taxation down to zero for several years. In return, accounting management requires the use of an accountant or an approved management center.
Automated control of rental income: what has changed
The tax administration now automatically cross-references income declarations with data transmitted by rental platforms and the Sirene directory. A landlord who fails to declare rents received through a platform risks a reassessment based on data already in the possession of the tax authorities.
Penalties for late or omitted declarations range from a 10% increase (simple delay) to heavier sanctions in the case of deliberate non-compliance. Spontaneous regularization remains possible and limits the increases applied.
- Check each year that the declared amounts match the statements from the platforms
- Keep proof of deducted expenses for at least three years (duration of the recovery period)
- Declare income from sub-lettings or seasonal rentals, even if occasional
The choice between unfurnished and furnished rental, between micro and real, depends on the expense profile of the property and the landlord’s wealth strategy. A recently acquired property with a significant loan leans towards the real regime (property or BIC). An old property without renovations or loans can suffice with the micro-property or micro-BIC.
The comparative simulation of the two regimes before each declaration remains the only reliable way to arbitrate, especially since the rules change regularly, as the reform of tourist rentals has reminded us.