You should neither rush to buy under the LMNP regime before the end of 2026 nor abandon this strategy: as of November 2026, the LMNP restriction provided for in the 2027 finance bill (projet de loi de finances) has not been adopted. The government's text provided for capping deductible depreciation (2.5% per year and €7,000 per tax household, 1.5% and €5,000 for tourist furnished rentals), but the National Assembly (Assemblée nationale) removed this measure at first reading on 30 October 2026. It may nevertheless be reintroduced in the Senate or during the rest of the procedure. Moreover, the proposed cap did not protect purchases made before 2027: buying "before" therefore did not guarantee avoiding it. The right decision rests on the property's profitability, not on tax urgency.
Information up to date as of November 2026. The 2027 budget has not been definitively adopted.
Summary
- Proposed measure: a cap on LMNP depreciation from financial years closing in 2027, with a limited transitional regime for prior depreciation.
- Status: removed by the National Assembly at first reading (vote of 30 October 2026), parliamentary shuttle (navette parlementaire) under way.
- Already in force: reintegration of depreciation into the capital gain on sales since 15 February 2025, and reduced micro-BIC allowances for tourist furnished rentals.
- Strategy: favour quality long-term furnished rental, and compare it with unfurnished rental and the "bailleur privé" status.
What the 2027 finance bill provided for
Item | Government text |
|---|---|
Standard furnished rental | Depreciation capped at 2.5% per year and €7,000 per tax household |
Tourist furnished rental | 1.5% per year and €5,000 per household |
Excess depreciation | No further carry-forward possible for financial years closing from 2027 |
Stock of prior depreciation | Deductible until 31 December 2036, up to half of the income |
Exclusions | LMP, micro-BIC, student residences, senior residences, Ehpad |
In committee, amendments had proposed excluding furnished leases of primary residences, mobility leases (baux mobilité) and student rentals, or, conversely, abolishing depreciation for tourist furnished rentals purchased from 2027. Updates on the examination of the text are available on the official website of the National Assembly.
Where does the text stand?
A removal at first reading
On 30 October 2026, members of the National Assembly adopted amendments removing the paragraphs of Article 7 devoted to capping LMNP depreciation (45 votes in favour, 41 against). This is a step, not a final decision.
The next steps
The text must be voted on as a whole, examined by the Senate, and then referred to a joint committee (commission mixte paritaire). The government may also use Article 49.3 with a text that may or may not retain the measure. The finance act must be adopted before the end of the year. If you are considering selling an existing furnished property, an estimate of your rental property will help you decide.
What to watch in December 2026
The points to follow are the text adopted by the Senate, the conclusions of the joint committee (commission mixte paritaire) and, where applicable, the text retained if Article 49.3 is used. The date of application and any transitional measures will appear in the promulgated act. In the meantime, no major wealth decision should be made solely on the basis of the bill.
What has already changed for LMNP
Reintegration of depreciation into the capital gain
Since 15 February 2025, depreciation deducted during the rental period is reintegrated into the calculation of the capital gain on resale, except for certain serviced residences. The LMNP tax advantage is therefore partly recaptured on exit.
Micro-BIC for tourist furnished rentals
Non-classified furnished tourist accommodations benefit from a 30% allowance up to a limit of €15,000 in revenue, while classified furnished tourist accommodations benefit from a 50% allowance up to a limit of €77,700. The tax rules are detailed on the official Service-Public.fr page on furnished rental income.
Becoming a professional furnished landlord
When furnished rental revenue exceeds €23,000 per year and exceeds the household's other earned income, the landlord becomes a professional furnished landlord (loueur en meublé professionnel, or LMP), with a different tax and social security regime. Investors who are expanding their furnished property portfolio need to anticipate this threshold, which notably changes the taxation of capital gains and liability for social security contributions.
Filing obligations
A furnished landlord must declare the start of their activity, choose their regime (micro-BIC or réel) and, under the réel regime, keep accounting records. Many investors use a chartered accountant (expert-comptable), whose fees are deductible.
Buy before 2027 or change strategy?
Buying before the end of the year: a false economy
The original text applied to financial years ending from 2027 onward, regardless of the purchase date. Rushing to sign for a less profitable property in order to "take advantage of" a regime under threat makes no sense.
Favor quality long-term furnished rentals
Furnished properties let as a primary residence, particularly to students and young professionals, are the most strongly defended in the debates and remain the most stable from a tax standpoint. Studios and apartments for sale near universities and employment hubs fit this strategy.
Compare with unfurnished rental and the statut du bailleur privé
Since 2026, the statut du bailleur privé (private landlord status) allows depreciation of a new property, or an older property that has been renovated (with works representing at least 30% of the price), in a multi-unit building, let unfurnished for 9 years subject to rent ceilings, with depreciation capped at €8,000 per year for an intermediate rent.
Think in terms of net yield before tax
With loan rates of around 3.5 to 4%, a project must stand on its own without tax optimization. Taxation then comes in to improve an investment that is already profitable.
Diversify rather than bet everything on one regime
A portfolio combining unfurnished rental, long-term furnished rental and, possibly, new-build property under the statut du bailleur privé is better able to withstand tax changes than a portfolio built entirely on a single scheme. Diversifying locations and types of tenants also reduces the risk of vacancy.
Think about resale from the moment of purchase
With depreciation now added back into the capital gain, the exit taxation of LMNP (loueur en meublé non professionnel, non-professional furnished landlord status) has become heavier. Before buying, estimate the tax that would be due on a resale after 10 or 15 years: it may influence the choice between furnished and unfurnished rental.
Simulation: the effect of the cap on an LMNP investment
To gauge what the cap would have changed had it been adopted in the government's version, here is a simplified example. The figures are indicative and do not replace the analysis of a chartered accountant.
The project
A furnished studio purchased for €150,000 (of which €120,000 is for the building, excluding land and furnishings), let at €7,800 per year. Expenses (property tax, condominium charges, insurance, accounting) and loan interest amount to €4,500 per year, giving a result before depreciation of €3,300.
Under the current rules
Depreciation of the building over roughly 30 years amounts to nearly €4,000 per year, to which is added depreciation of the furnishings. Depreciation cannot create a deficit, but it is enough to fully neutralize the taxable result of €3,300: no tax is due on the rent, and the excess depreciation is carried forward to subsequent years.
With the proposed cap
With a rate limited to 2.5% per year, the depreciation of the building would be reduced to €3,000, within the limit of €7,000 per tax household. The taxable result would become approximately €300 (excluding depreciation of furniture), and the excess would no longer be carried forward. The tax impact would remain moderate on this small project, but it would be greater for an investor holding several properties, since the €7,000 cap would apply per tax household and not per property.
What the simulation shows
For a single, modest-sized investment, the proposed cap would not have called into question the appeal of the LMNP (non-professional furnished rental) regime. It would mainly have penalised investors holding several furnished properties and furnished tourist accommodation, with a rate of 1.5% and a cap of €5,000. This is why the rest of the parliamentary debate should be followed closely if this applies to you. To choose a property suited to your strategy, talk to an advisor who knows the rental demand in your city.
The expert's view
"Since the presentation of the 2027 budget, many investors have been asking me about the LMNP, some of them urgently, as if they had to buy before the end of the year. I always give them the same answer: you don't buy a property for a tax loophole, you buy it for its location, its rental demand and its yield. The cap on depreciation was removed at first reading, it may come back, but even in its initial version it would not have made the LMNP unattractive for a reasonable investment. What seems more important to me is the quality of the property: a well-located studio, with a good DPE (energy performance diagnostic), rented to students or young professionals, will remain profitable whatever tax regime is chosen. I advise following the final vote, then reviewing with a chartered accountant the most suitable regime. In the meantime, a good opportunity remains a good opportunity."
— Frédéric Rémy, Commercial Performance Director at Capifrance
Conclusion
The restriction of the LMNP in 2027 is uncertain: proposed by the government and removed at first reading, it may still return. It justifies neither a hasty purchase nor abandoning a sound furnished rental strategy. Choose a profitable property, follow the final vote and adjust your tax regime afterwards.
Browse the studios and apartments for sale for rental investment and talk to an advisor who knows the rental demand in your city. If you are considering selling an existing furnished property, request an estimate of your rental property. Do you know investors who want to rebalance their assets? Become a Capifrance business referrer.
FAQ - Frequently asked questions
Is the LMNP being abolished in 2027?
No. The proposal aimed to cap depreciation, not to abolish the regime, and this measure was withdrawn at first reading.
Will purchases made in 2026 be protected?
The initial text did not provide any protection linked to the purchase date: it applied to financial years closing from 2027 onwards.
Is the LMNP still more advantageous than unfurnished rental?
Often yes for small furnished units, but the add-back of depreciation into the capital gain reduces the advantage upon resale.
When will the final rules be known?
After the final adoption of the 2027 finance act, normally by the end of December 2026.
Is the micro-BIC regime affected by the proposed cap?
No, the micro-BIC regime does not allow the property to be depreciated: it applies a flat-rate allowance to revenue. The cap applied only to the réel regime.
Are student and senior residences affected?
The initial text excluded from the cap residences for students, young people in training, elderly people and medicalised establishments.
Should you switch to unfurnished rental to avoid the changes?
Not necessarily: unfurnished rental also has its own tax constraints. The choice should depend on your situation, the type of property and your long-term objectives.
Can an LMNP investment be made through a SCI?
A SCI (société civile immobilière) that rents out furnished property on a regular basis is in principle subject to corporate income tax, which completely changes the taxation. Seek advice before choosing this structure.
Did the cap apply to properties purchased before 2027?
Yes, in the government's version: it applied to financial years ending from 2027 onwards, regardless of the purchase date, with a limited transitional regime for depreciation already carried forward.
Who can help me choose my tax regime?
A chartered accountant (expert-comptable) specialised in furnished rentals, or your notary. Your real estate advisor, for their part, helps you choose a property suited to your strategy.
Is LMNP income subject to social contributions?
Yes, non-professional furnished rental (LMNP) income is subject to social contributions, at a rate of 18.6% under the rules currently in force.
Author
Frédéric Rémy – Director of Sales Performance
A real estate professional with several years of experience within the Capifrance network, I would like to share essential advice with you to help you successfully complete your property project with our advisors.
