LMNP STATUS
with depreciation

Conditions: 

  • Purchase one or more properties in serviced residential complexes
  • Commitment to let by commercial lease for a minimum of 9 years

Advantages:

Deductions from your rental income (BIC, commercial income) of the following elements in order to eliminate the profits:

  • Co-ownership complex charges
  • Interest on loans
  • Accountant’s fees
  • Purchase expenses
  • Taxe foncière (one of two property taxes)
  • Property insurance
  • Depreciation of 85% of the real estate (including notary fees) and 100% of the furnishings

Refund of VAT

  • On the investment
  • On all expenses related to the apartment (commitment to a rental of 20 years)

Occupy your property as a résidence de tourisme

Benefit from trouble-free management

Guaranteed rental for fixed rental leases

The principal interest of LMNP compared to other types of investment lies in a lasting tax exemption for your rental income (about 30 years depending on the amount of the loan and the rate of return). Principally for income in the upper tax brackets.

Your rental will be declared under the BIC (bénéfices industriels et commerciaux – industrial and commercial profits) system.

The BIC system is very advantageous for rental investments, because in addition to the deduction of all expenses related to your investment and the refund of the related VAT, BIC allows you to depreciate 85% of the value of your property investment and 100% of the furnishings (with no time limit).

Courtesy of this depreciation (a fictitious expense) reducing your BIC income from your apartment, you will pay little or no tax in the long term.

To date, this remains the ideal solution for establishing an additional income or a complementary tax exempt income once the loan has been repaid, as opposed to a standard rental investment, where once financed, the property will bring you income under the real estate system. However, this will then be heavily taxed at 15.5% of social deductions and included in your overall income and taxed at your marginal taxation rate.

Purchasing a property in a serviced residential complex

Example of the effect of depreciation:

Apartment + Parking space: 190 000 €/exclusive of VAT

Furnishings: 10 000 €/exclusive of VAT
Total: 200 000 €/exclusive of VAT

Maximum potential depreciation: 171 500 €

Potential tax savings (throughout the period of depreciation):

Social deductions at 15.5%: 26 582 €

Income tax:

34 300 € for a marginal tax rate of 20%

51 450 € for a marginal tax rate of 30%

70 315 € for a marginal tax rate of 41%

77 175 € for a marginal tax rate of 45%

Developments available:

  • 4-star MMV apartment building L’étoile des Cimes Ste Foy in Tarentaise Savoie
  • 5-star Odalys apartment building Eden Arc Les Monarques Arcs 1800 Savoie
  • 4-star MMV apartment building le Cœur des loges Les Menuires Savoie
  • Chalets les Hauts du Monal Ste Foy in tarentaise Savoie