LMNP in 2026: What’s Really Changing

The 2026 Budget Act, enacted on February 19, 2026, along with the Le Meur Act (No. 2024-1039 of November 7, 2024), fundamentally overhaul the tax framework for non-professional furnished rentals. Here is an overview of the key changes for investors.

Reminder: What is the LMNP status?

The status of Non-Professional Furnished Rental Landlord (LMNP) applies to individuals who rent out furnished housing, provided that their annual rental income does not exceed €23,000 or account for more than 50% of their household income. The income generated falls under the category ofIndustrial and Commercial Profits (BIC), in accordance with Article 35 of the General Tax Code (CGI).

There are two tax regimes: themicro-BIC(flat-rate allowance) and thesimplified actual cost regime(deduction of actual expenses and depreciation of the asset).

Unrated vacation rentals: a tax setback

Applicable legislation:Law No. 2024-1039 of November 7, 2024 (Le Meur Act) – effective for income received on or after January 1, 2025, and reported in the spring of 2026.

This is the most noticeable change. Forunclassifiedvacation rentals (such as those listed on Airbnb, Booking, and Abritel without an official certification), the micro-BIC tax regime has been significantly tightened:

Exceeding the €15,000 threshold triggers amandatoryswitch to the actual income tax system, which requires formal accounting (Form 2031 and frequent use of a certified public accountant).

Exception maintained:Classifiedtourist accommodations (with a classification issued by an accredited body in accordance with the Atout France procedure) retain their benefits: a cap of €77,700 and a 50% tax deduction. Obtaining or renewing an official classification therefore becomes a major strategic advantage.

Recapture of depreciation in the capital gain

Applicable provision:Section 28 of the 2025 Finance Act—amending Section 150 VB of the General Tax Code—effective as of January 1, 2025.

This is the most significant change for investors under the actual income tax regime. From now on,depreciation deductions taken for tax purposes during the rental period are added back into the calculation of the taxable capital gain whenthe propertyis sold.

In practical terms: if you have deducted €60,000 in depreciation over 12 years, the purchase price used to calculate the capital gain will bereduced by that amount, thereby increasing the taxable capital gain by the same amount.

Two significant mitigation factors remain, in accordance with Article 150 VC of the General Tax Code:

• The tax deductions based on the length of ownership remain in effect: full exemption from income tax after22 years, and exemption from social security contributions after30 years.
• Transfers made without consideration (such as gifts or inheritances) arenot subjectto this reinstatement.

Complete Exemptions:Student housing, senior housing, and nursing homes remainfully exemptfrom this reclassification. This is a key advantage for investments in assisted living facilities.

Increase in social security contributions on business income

Applicable legislation:Social Security Financing Act for 2026, adopted on December 16, 2025.

The CSG is being increased by 0.4 percentage points, from 9.2% to9.6%. Combined with other social security contributions, this increase raises the overall rate applicable toBIC income—including LMNP income—from 17.2% to18.6%.

Please note:Capital gains on real estate are still subject to a 17.2% tax rate. Only ordinary BIC rental income (rent received) is subject to the increase.

Establishment of the status of private landlord

Applicable legislation:2026 Finance Act (enacted on February 19, 2026) – Jeanbrun provision.

A new provision introduced by the 2026 Budget Act, this status is intended for landlords who rentout unfurnished properties. It introduces—for the first time in the unfurnished rental market—adepreciation mechanismfor the property ranging from 3% to 5.5% per year, in exchange for significant restrictions:

• Rent caps set below market rates
• Minimum lease term
• Energy performance criteria for housing

This measure does not directly affect the LMNP scheme, but it changes the trade-off between unfurnished and furnished rentals for new investment projects.

What remains the same

In the face of several parliamentary attempts to dismantle the actual LMNP scheme (notably Amendment No. I-3763, which sought to eliminate depreciation and was rejected in committee), the 2026 Finance Actpreserves the scheme’s fundamental benefits:

• Depreciation under the actual cost method remains unchanged, with no 2% cap or annual limit. The deduction by component (structure, roof, equipment, furniture) is maintained.
• Thelong-term micro-BIC(standard furnished rental, non-tourist) retains its 50% tax deduction and its €77,700 cap.
• The deduction ofactual expenses(loan interest, condominium fees, insurance, and management fees) remains fully applicable under the actual income tax system.
• The provision allowingBIC lossesto be carried forward against income of the same type for 10 years remains in effect.

In 2026, the LMNP status remains one of the most competitive tax structures for rental real estate investments. Long-term furnished rentals under the actual income tax regime—particularly in student housing, senior housing, or traditional residential properties—continue to offer substantial advantages: unlimited deductible depreciation, deductible actual expenses, and long-term capital gains tax deductions.

The legislative changes for 2025–2026 primarily target short-term vacation rentals and address exit taxation. For any investment project, a personalized analysis remains essential, taking into account your tax situation, the nature of the property, and the intended holding period.

Are you interested in investing in LMNP?Our team at Apromeos can help you choose a property, set up the tax structure, and manage your investment.Contact us