The status of non-professional furnished rental company (LMNP) is, of course, very advantageous, but the declaration and taxation formalities of this activity should not be overlooked.
Before focusing on the steps to obtain the PMNL status, it is good to remember what this status is.
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Reminder of the PMNP status
In the case of furnished rentals, two statuses are possible, depending on the income generated by renting the furnished property:
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- LMP status: To obtain the status of professional furnished rental, two conditions must be cumulatively met: the income from this investment amounts to more than 23,000 euros, which represents more than 50% of the household’s taxable income.
- LMNP status: when one of the two conditions of the LMP status is not met, that is to say, the income generated by this investment amounts to less than 23,000€ and/or represents less than 50% of the taxable household income.
This second law offers the possibility of generating rental income that becomes non-taxable. The LGPN status applies to housing as a primary residence or seasonal or temporary residence.
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Initial declaration of start of activity — Form P0i
The activity of non-professional furnished rental requires registration with a business formalities center within 15 days of starting the rental of the property.
In this case, it is the commercial court registry where the rental of real estate takes place.
This registration using form P0i allows, among other things, to:
- obtain a SIRET number;
- announce the existence of this activity;
- indicate the chosen tax regime.
It should be noted that, in the case of more than one furnished rental, the competent commercial court registry is either that of the location of the main activity or that of the location of one of the furnished apartments.
Choice of tax regime
The LMNP status allows you to choose between two tax regimes: on one hand, the micro-BIC regime, and on the other hand, the real system.
- The micro-BIC regime: in the presence of rental income below the micro-enterprise threshold (72,500 euros for 2020, 2021, and 2022), a flat-rate regime applies automatically. Thus, the net taxable income is calculated after a 50% reduction. Furnished rental is, in this regard, more advantageous than unfurnished rental, since the flat-rate regime for the latter allows for only a 30% reduction.
- The real regime: in the presence of rental income above the micro-enterprise threshold (72,500€ for 2020, 2021, and 2022) or if the owner wishes, the furnished rental is subject to the regime. Therefore, the landlord can deduct all expenses related to the furnished housing under the PNLMM law, including the depreciation of the property, provisions, as well as maintenance and current repairs, acquisition costs, interest on any loans, etc.).
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