You have undoubtedly heard of the status of non-professional furnished rental company or LMNP. If you have just purchased a mobile home and would like to rent it out – with the equipment and furniture that goes with it – this status is for you. In this short guide, we will talk about the functioning and advantages of LMNP status and the right tax regime to adopt.
What is LMNP status?
You can claim the status of non-professional furnished rental company if you intend to rent out premises equipped and furnished for living – this could be an apartment or a mobile home for example.
Whether or not there is furniture in the mobile home is important legally and fiscally. If you rent an unfurnished home, the income you earn from it is property income. If you rent one with furniture inside, the rental income falls under the industrial and commercial profits regime or BIC.
Are you interested in LMNP status? The law imposes two sine qua non conditions on you:
- Rental income is capped at €23,000 per year;
- They must also not exceed the total salaries and wages of your tax household.
The advantages of LMNP status
When declaring your rental income, you will have to choose between two tax regimes: the micro-BIC tax regime and the simplified real tax regime.
- The micro-BIC regime automatically entitles you to a flat rate reduction of 50% calculated directly on the tax base, in this case your rental income;
- The simplified real regime allows you to deduct all the charges and expenses that you will have incurred in the context of your activity as a non-professional furnished rental company.
- With the simplified real regime, all the charges and expenses that you will have incurred as part of your activity as a non-professional furnished rental company will not be part of the tax base; the scheme also allows you to recover VAT on the acquisition of the mobile home and its equipment.
Choosing the right tax regime
Making the right choice in terms of tax regime is important so that the rental investment is as profitable as possible. The goal is in fact to have a tax base that is as light as possible. To this end, the best you can do is to rely on what already works.
In this case, most successful rental investors opt for the simplified real regime. If mobile home owners are flocking to this regime, it is in particular with a view to recovering the VAT they paid for the acquisition of their property – the tax represents 20% of the value of the accommodation – but for all investments made in their LMNP activity.
Added to this is the fact that all annual charges, including the rental price of the plot, are not part of the tax base.
The advantages of the simplified real regime are considerable and allow you to make the most of your rental investment. The other side of the coin: in practice it turns out to be quite complex. To avoid getting lost, you will probably need the support of an agency specializing in LMNP status. Which can provide you with more information on this status and its two tax regimes, particularly if you have not yet purchased your mobile home.
The support of a consulting company allows you to address several points that you could miss but above all to avoid finding yourself in delicate situations (illegal clauses in the lease, difficulty or even impossibility in renting or reselling the property). mobile home, botched assessment of security and insurance, etc.)