Do you rent out (or plan to rent out) a furnished property in French Guiana, Martinique or Guadeloupe? The non-professional furnished rental status (LMNP) is one of the most common frameworks for making a property profitable in the French Antilles-French Guiana. But behind this acronym lie several regime choices, technical concepts such as depreciation, and specific features unique to the overseas territories. This article gives you a clear, accessible overview to help you talk confidently with a professional.
⚠️ General information, not personalised tax advice. The taxation of furnished rentals changes regularly and depends closely on your situation. The rules, thresholds and rates vary from one year to the next. Before making any decision, consult a chartered accountant or a tax adviser, and check the latest information on impots.gouv.fr.
What is the LMNP status?
The Non-Professional Furnished Rental status (LMNP) applies to private individuals who rent out a property furnished with the furniture and equipment needed for immediate occupancy, where this activity is not their main profession. It might be a studio rented year-round to a student in Cayenne, an apartment let on a short-term basis in Fort-de-France, or a tourist furnished rental in Sainte-Anne.
A key point: unlike unfurnished (empty) rentals, income from a furnished rental does not fall under property income. It is taxed in the category of industrial and commercial profits (BIC). This difference opens the door to specific calculation methods, sometimes more favourable, but also to particular obligations.
Why “furnished” changes everything
Classifying a property as furnished requires meeting a list of equipment defined by regulation (bedding, cooking hobs, crockery, storage, etc.). If the property does not meet these conditions, you could fall back into the unfurnished rental regime, with a different tax treatment. Here too, a professional can confirm that your property ticks all the boxes.
LMNP or LMP: where is the line drawn?
The “non-professional” nature of LMNP stands in contrast to the Professional Furnished Rental status (LMP). The shift from one to the other depends, according to the regime in force, on the level of your rental income and its weight relative to your other income.
The consequences are not trivial:
- Under LMNP, the activity remains secondary, with lighter rules on certain aspects.
- Under LMP, the social security regime, the handling of losses and the treatment of capital gains differ significantly.
You can shift to LMP without intending to if your rents rise sharply. This is one of the reasons why an annual review with a chartered accountant is so valuable: each year, they check which side of the line you fall on.
Micro-BIC or actual regime: two different logics
Once under LMNP, you generally have a choice between two tax regimes. This choice shapes your entire tax situation.
The micro-BIC regime
The micro-BIC is the simplified regime. You declare your gross rents and the tax authorities apply a flat-rate allowance intended to represent your expenses; only the remaining portion is taxed. Its advantages:
- Simplicity: no detailed accounting to maintain.
- Clarity: you know in advance what proportion of your rents will be taxed.
Its limitation: if your actual expenses exceed the allowance, you pay tax on amounts you have, in practice, spent. Moreover, the micro-BIC is only available subject to revenue ceiling conditions, which vary according to the regime in force and the type of rental (long-term, classified or unclassified tourist furnished rental).
The actual regime
Under the actual regime, you deduct your actual expenses: loan interest, insurance, property tax, works, management fees, concierge service costs, and more. You can also apply depreciation to the property and the furniture (see below). As a result, the taxable profit is often greatly reduced, sometimes brought to zero for several years.
The trade-off is more demanding accounting, which generally justifies engaging a chartered accountant. For many owners in the French Antilles-French Guiana who financed their property with a loan or carried out works, the actual regime nevertheless proves more advantageous than the micro-BIC. A comparative simulation is the only reliable way to decide in your case.
Depreciation: the key mechanism of the actual regime
Depreciation consists of recording, each year, the theoretical loss in value of your property and its furniture, and deducting it from your rental income. In practice, the price of the property (excluding land) and that of the furniture are spread, for accounting purposes, over several years.
This mechanism often makes it possible to wipe out a large part of the taxable profit, without any additional cash outlay on your part: it is an “accounting” expense. This is precisely what makes the actual regime so attractive.
Two points to watch, however:
- Depreciation does not create an unlimited carry-forward loss: its allocation follows precise rules.
- A recent change, to be verified, has altered the treatment of depreciation upon resale (see the next section).
Depreciation is a technical area where a calculation error can be costly: this is typically the chartered accountant’s domain.
The recent reform to verify: depreciation and resale
A recent legislative change has brought the calculation of capital gains for LMNP closer to that applicable to professional landlords. The general idea: the depreciation deducted during the rental period would, under certain conditions, reduce the acquisition value used to calculate the capital gain at the time of resale. The taxable capital gain could therefore turn out to be higher than before.
A few cautionary markers:
- This topic has seen recent adjustments and clarifications on its application: treat it as “to be checked on a case-by-case basis” with a professional and on impots.gouv.fr.
- Certain situations or certain types of managed residences could be treated differently.
- The micro-BIC regime, which does not apply depreciation, is in principle not affected by this reintegration, but often remains more costly each year.
The right approach is to reason over your entire horizon: a regime that is advantageous during the rental phase may have a deferred cost at resale. This trade-off warrants a personalised simulation.
The specific features and advantages of the overseas territories
Investing and renting furnished property in the French Antilles-French Guiana has particular features worth knowing about.
- Incentive schemes specific to the DROM. The overseas territories benefit from several investment support regimes, particularly in real estate and equipment. The best known is the Girardin law; we have a dedicated article on it, to read below.
- Specific tax reductions. Depending on the schemes in force and subject to conditions, certain investments or works carried out overseas may qualify for particular tax benefits, distinct from the LMNP framework alone.
- A thriving rental market. Tourism, professional mobility and pressure on housing support the demand for furnished rentals in Martinique, Guadeloupe and French Guiana, which can strengthen the overall profitability of your project.
Be careful: these schemes follow strict rules (rental commitments, ceilings, tenant income conditions in some cases) and their combination with the LMNP regime must be studied. A poorly structured arrangement can cause the tax benefit to be lost. Have your strategy validated by an adviser who knows the local realities.
VAT and social contributions: what you need to know
VAT, generally not applicable
For a standard tourist furnished rental or a furnished residential rental, the activity is, in most cases, exempt from VAT. VAT only becomes an issue in specific situations (for example when you offer para-hotel services such as breakfast, regular cleaning or guest reception). If you are considering this type of service, take stock with a professional beforehand.
Social contributions, depending on thresholds
Income from furnished rentals may, depending on your level of revenue and the regime in force, give rise to social levies or, beyond certain thresholds, to social security contributions as a professional activity. Crossing these thresholds can significantly change your situation. This is another point to monitor each year with your chartered accountant.
How to get started (or optimise) your LMNP properly
A few useful reflexes, whatever your project:
- Run a comparative simulation of micro-BIC versus actual regime, factoring in your resale horizon.
- Keep all your supporting documents for expenses and works: they are the key to the actual regime.
- Carry out an annual review to check your status (LMNP/LMP) and any threshold crossings.
- Inform yourself from the right sources: your chartered accountant and the official impots.gouv.fr site remain the references.
- Plan ahead for management: delegating rental management can, under the actual regime, generate deductible expenses while freeing you from day-to-day tasks.
And where does concierge service fit in?
Under the actual regime, concierge and management fees are among the deductible expenses: delegating the management of your furnished rental can therefore be part of an optimisation strategy, in addition to saving you time and peace of mind. Hostel Toucan supports owners in the French Antilles-French Guiana with full management and clear reporting, useful for preparing your tax return and talking with your accountant.
That said, a concierge service does not replace tax advice: we point you towards best practices, but it is indeed a chartered accountant who validates your regime and your calculations.
LMNP taxation in the overseas territories offers real opportunities, provided you master the rules and anticipate recent changes. Take the time to get proper support: a good decision upfront is worth more than a correction after the fact.
👉 To go further: declaring your furnished rental income and overseas tax relief (Girardin law). And if you would like to delegate the management of your property with complete peace of mind, discover our owners’ concierge service or contact us to discuss your project.