Furnished Lettings in France: LMP, LMNP and Short-Term Rentals

What Counts as a Furnished Letting

A furnished letting is one where the furniture and equipment provided in the let premises are sufficient for the tenant to enter and begin living there normally with only their personal effects. The mandatory minimum furniture list for principal residence leases under the 2015 decree (Décret 2015-981 du 31-7-2015) includes: bedding (duvet or blanket); blackout window covering for bedrooms; hob; oven or microwave; fridge with a freezer compartment (≤-6°C); crockery; cooking utensils; table and seats; shelving; lighting; and domestic cleaning equipment.

Three definitions of "professional" furnished letting

French law provides three independent definitions of professional furnished letting, each relevant to a different legal regime.

• Legal definition (juridique): A landlord who habitually lets several separate furnished dwellings. Excludes landlords letting rooms in their own home or letting fewer than four rooms they have recovered from previous tenants.
• Social security definition (sociale): The activity is professional where receipts exceed €23,000 per year for the tax household AND either (a) receipts exceed all the household's professional income combined, or (b) the properties are let to transient guests on a per-night/week/month basis without domicile election.
• Fiscal definition (fiscale): The same two conditions as the social definition — receipts above €23,000 AND receipts exceeding the household's combined professional income. This threshold determines deficit imputation and capital gains rules (CGI Art. 155, IV).

The Furnished Lease for Principal Residence

Where a furnished property constitutes the tenant's principal residence, the lease is governed by public order provisions of the loi du 6 juillet 1989 (Title I bis, Art. 25-3 to 25-11) supplemented by CCH Art. L 632-1 to L 632-3. Many provisions of the unfurnished residential framework also apply: the non-discrimination principle; the condition report; technical diagnostics; the logement décent standard including energy performance; caution rules; and permitted documentation from prospective tenants.

Lease content and minimum duration

The lease must be in writing, comply with the standardised form (Décret 2015-587 du 29 mai 2015), and be accompanied by a furniture inventory and detailed condition report. The minimum duration is one year, or nine months for student tenants.

Deposit

The deposit for a furnished principal residence lease may be up to two months' rent excluding charges (compared with one month for unfurnished). All other deposit rules are the same: no interest, no in-lease revision, return within two months (or one month if entry = exit report), 10% monthly penalty for late return.

Rent, charges, notice, and termination

Rent is freely set in principle, subject to the same freeze on class F and G properties and the same Élan encadrement des loyers experimental scheme (where applicable) as for unfurnished lettings. For furnished lettings in controlled zones, the reference rents are determined from the unfurnished reference rents plus a furnished supplement per square metre. Annual revision is capped at IRL variation and requires an express revision clause. Charges may be recovered as monthly provisions with annual reconciliation or as a flat forfait revised annually. Tenant notice: one month at any time. Landlord notice: three months before lease expiry; limited grounds (owner recovery, sale, or legitimate and serious reason). For elderly or low-income tenants, the landlord must offer alternative accommodation. Fraudulent landlord notices: criminal offence (up to €6,000/€30,000).

The Bail Mobilité

The bail mobilité was created by the Élan Act to provide flexible short-term furnished accommodation for people in mobility situations. It is governed by the public order provisions of Loi 89-462 Art. 25-12 to 25-18.

Eligible tenants

The lease is available only to tenants who, at the lease commencement date, are: in vocational training; in higher education; in an apprenticeship contract; on a placement; performing voluntary civic service; or on a temporary professional assignment.

Duration and features

The lease must be for a duration of between one and ten months. It is neither renewable nor tacitly extendable. It may be amended once by addendum provided total duration does not exceed ten months. If the parties subsequently conclude a new lease on the same property, that new lease automatically falls under the furnished principal residence rules. No deposit may be demanded. Charges are recovered exclusively as a flat forfait. The landlord may not give notice in-lease; the tenant may give notice at any time with one month's notice.

Short-Term and Tourist Lettings

What counts as a change of use

Letting a furnished property repeatedly for short periods to transient guests who do not elect it as their domicile constitutes a changement d'usage under CCH Art. L 631-7. In cities with more than 200,000 inhabitants and in the departments of Hauts-de-Seine (92), Seine-Saint-Denis (93), and Val-de-Marne (94), prior authorisation from the municipality is mandatory. Other cities may institute the procedure voluntarily.

Prior authorisation conditions

Authorisation conditions are set by municipal regulation. Authorisation may be: personal (attached to the landlord); or real and definitive (attached to the property). In Paris, it is conditional on a compensatory transformation of non-residential premises into housing of equal or greater surface area — a "titre de compensation." Municipalities may also create temporary authorisation schemes limited to nine years maximum per landlord. Platforms (Airbnb, Abritel, etc.) must be provided with the registration number and a sworn declaration of prior compliance before publishing an advertisement.

Primary residence: 120-day annual cap

In municipalities that have implemented a registration system (téléservice d'enregistrement), the principal residence — occupied for at least eight months per year by the landlord — may not be let for short stays for more than 120 days per year (C. tourisme Art. L 324-1-1, IV). Exceeding this limit, or refusing to communicate the night count to the municipality on request, exposes the landlord to a fine of up to €10,000. Platforms must implement automatic blocking of listings beyond 120 days; failure to block: fine up to €50,000 per property. Beyond 120 days, the property ceases to qualify as a principal residence and a change of use authorisation becomes necessary.

Secondary residences and rental of the full property

Any person offering a secondary residence as a tourist furnished letting must file a prior declaration with the municipality (all cities in France): Cerfa form 14004*03. Failure: fine up to €450. In cities with a change-of-use scheme, prior authorisation is additionally required. Violation: civil fine of €50,000 per property and restoration of residential use (CCH Art. L 651-2).

Tax Treatment: BIC Regime

Classification as BIC — always commercial

Furnished letting is always a commercial activity for tax purposes, falling within the BIC (bénéfices industriels et commerciaux) category — whether occasional or habitual (CGI Art. 35, I-5° bis). This contrasts with unfurnished letting, which falls under revenus fonciers. Exoneration is available for landlords letting rooms in their own principal residence at reasonable rents (up to €199/m²/year in Île-de-France, €147 elsewhere in 2023), and for occasional tourist lettings from the principal residence below €760/year in aggregate (CGI Art. 35 bis).

Micro-BIC

Where annual receipts did not exceed €77,700 in years N-1 or N-2, the landlord falls under the micro-BIC regime by default: they declare gross receipts and the administration applies a flat 50% deduction for all expenses (including amortissement). The 50% abatement cannot produce a result below €305. The landlord may opt for the régime réel (simplified or normal) instead, by filing the option before the annual income tax return deadline for the preceding year.

Régime réel

Mandatory above €77,700; available by option below. Under the régime réel, actual deductible expenses are charged against receipts: mortgage interest; property management fees; insurance; repair and maintenance costs (not capital expenditure); property tax; depreciation (amortissement) of the building and furniture (excluding land). Amortissement is the key tax benefit of the régime réel for LMNP: by systematically depreciating the property, the landlord can often reduce taxable income to near zero for many years. Amortissements that create a deficit are not deductible and are instead carried forward indefinitely to be applied in future profitable years — a fundamental structural difference from the LMP regime.

LMP: deficit on global income

For professional landlords (LMP), deficits arising from the furnished letting activity are imputable on global income without limit, subject only to the exclusion of deficits arising from amortissements that are formally excluded from deductible charges. If global income in the year of the deficit is insufficient, the balance carries forward to global income for up to six years.

LMNP: ringfenced deficit

For non-professional landlords (LMNP), deficits from furnished letting may only be set against income of the same nature (other furnished letting income) realised in the same year or the ten following years. They cannot reduce global income.

Capital gains

LMP capital gains on disposal of a let property follow the professional capital gains regime: total exemption after five years' activity where the average of the preceding two years' receipts does not exceed €90,000 HT (partial exemption up to €126,000 HT) (CGI Art. 151 septies). LMNP capital gains follow the private real estate capital gains regime: 19% income tax plus 17.2% social charges (combined 36.2%) before the standard holding period abatements reaching full exemption after 22 years (income tax) and 30 years (social charges).

VAT and CFE

Ordinary furnished letting — whether seasonal, permanent, or occasional — is exempt from VAT and may not opt for VAT payment. Landlords providing three or more hotel-style services (breakfast, regular cleaning, linen, and non-personalised reception) in addition to accommodation are subject to VAT as para-hôtellerie, at the 10% rate for lodging. Furnished letting is always a professional activity for CFE purposes — the LMP/LMNP distinction does not apply. Exemptions are available for: accidental letting of rooms in the landlord's personal home; habitual letting of part of the principal residence at reasonable rents; and tourism-classified lettings forming part of the landlord's personal home (CGI Art. 1459).

This article covers furnished lettings by private individuals and SCIs. Corporate landlords subject to IS follow different rules. The Censi-Bouvard income tax reduction (CGI Art. 199 sexvicies) was available to LMNP landlords for certain service residence investments made up to 31 December 2022. The €77,700 micro-BIC threshold is reviewed periodically. References are correct to the best of the author's knowledge as of the date of publication.