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.
