Tax-deductible renovation work under France's Non-Professional Furnished Rental Landlord (Loueur en Meublé Non Professionnel or LMNP) status depends on the tax regime selected and the nature of the expenses incurred. Income from furnished rentals is taxed under the Business Income category (Bénéfices Industriels et Commerciaux or BIC). Under the micro-BIC regime, landlords benefit from a standard 50% allowance for conventional long-term furnished rentals, subject to the applicable conditions, but cannot deduct individual renovation expenses. Under the LMNP actual expenses regime (régime réel), certain maintenance and repair costs can be deducted directly from taxable profits, while long-term investments generally have to be capitalized and depreciated over several years. Routine painting, minor plumbing repairs, heating system maintenance and certain electrical repairs may therefore qualify as deductible expenses. By contrast, complete kitchen renovations, major bathroom renovations, heat pump installations, thermal insulation work and full window replacements may need to be depreciated. Construction, reconstruction and extension work is generally not immediately deductible, although such expenditure may be capitalized and depreciated under the applicable accounting rules. Expenses incurred before the first rental may also be taken into account under certain conditions. Furniture and equipment required for furnished rentals, including beds, refrigerators and washing machines, are generally depreciable, while certain low-value purchases may qualify for immediate expense deductions. Under the actual expenses regime, other deductible costs may include mortgage interest, insurance, accounting fees, rental property management fees, certain condominium charges and property taxes paid by the landlord. LMNP tax reporting under the actual expenses regime requires accounting records distinguishing current expenses, capital assets and depreciation, together with professional income tax return form 2031 and the relevant information reported on form 2042-C-PRO. LMNP losses arising from deductible expenses may, subject to conditions, be carried forward against non-professional furnished rental profits for ten years. Depreciation cannot create or increase a tax loss. Since the 2025 tax reform, depreciation deducted under LMNP is generally taken into account when calculating taxable property capital gains upon resale, subject to exceptions. To optimize the tax treatment of renovation work, landlords should choose an appropriate tax regime, keep supporting documents, plan investments in advance and obtain professional accounting advice. Lodgis supports property owners with furnished rentals, tenant searches and rental property management in Paris and major French cities.
Do you own a furnished rental property and plan to carry out renovation or maintenance work? Depending on the nature of the work, certain expenses may be deducted from your taxable rental income, while others must be depreciated over several years.
Under France's Non-Professional Furnished Rental Landlord (Loueur en Meublé Non Professionnel or LMNP) status, understanding the tax rules applicable to renovation work is essential for optimizing the profitability of your property investment.
However, not all renovation work receives the same tax treatment. A simple repair, a complete renovation and a property extension are not accounted for in the same way.
Which renovation expenses are tax-deductible under LMNP? What is the difference between a deductible expense and depreciation? How should these expenses be declared?
Discover the key rules for optimizing furnished rental taxation and avoiding mistakes when preparing your tax return.
Non-Professional Furnished Rental Landlord (LMNP) status applies to owners who rent out furnished accommodation without meeting the tax criteria for professional furnished rental status.
Unlike income from unfurnished rentals, income generated by furnished accommodation is taxed under the Business Income category (Bénéfices Industriels et Commerciaux or BIC).
Two tax regimes may apply: micro-BIC and the actual expenses regime.
The micro-BIC regime provides a standard allowance on rental receipts to account for expenses associated with the rental activity.
For conventional long-term furnished rentals, this allowance is 50% under the currently applicable rules.
In return, landlords cannot deduct their actual expenses individually, including renovation and maintenance costs.
This regime may be attractive when actual expenses are relatively low.
The actual expenses regime allows landlords to take into account costs genuinely incurred in connection with their rental activity.
Certain maintenance expenses, mortgage interest and rental property management fees may be deducted.
Landlords may also depreciate certain investments, including furniture, the building excluding the value of the land, and capitalized renovation work.
It is therefore under the actual expenses regime that the distinction between immediately deductible renovation costs and depreciable improvements becomes particularly important.
To understand how renovation expenses are taxed under furnished rental arrangements, it is important to distinguish between two concepts.
A deductible expense is a cost that reduces the taxable profit of the rental activity for the accounting period to which it relates.
For example, this may include plumbing repairs or routine maintenance work.
Example:
A landlord receives €12,000 in annual rental income and incurs €1,500 in repair expenses that qualify as tax-deductible costs.
Assuming there are no other expenses, the profit before depreciation is:
€12,000 - €1,500 = €10,500
The renovation expenses therefore directly reduce the taxable profit for that year.
Depreciation is an accounting mechanism that spreads the cost of an investment over its expected useful life.
It applies in particular to improvements that provide lasting benefits to the property or create new equipment or facilities.
Example:
A landlord carries out a renovation costing €10,000, which is recorded as a capital asset and depreciated over ten years.
Assuming straight-line depreciation over a full year, the annual depreciation expense would be:
€10,000 / 10 years = €1,000 per year
This depreciation expense remains subject to the applicable tax rules. The entire cost is therefore not deducted in the first year.
Key takeaway: the same expense cannot be both immediately deducted and depreciated. Its tax treatment depends on factors including its nature, amount and impact on the property.
Under the actual expenses regime, maintenance and repair expenses can generally be deducted when they are incurred for the rental activity and do not involve creating a new asset or making a significant improvement.
Routine maintenance covers work intended to keep the accommodation in good condition.
Depending on its nature and extent, this may include:
These expenses help preserve the property's condition and ensure that its facilities operate properly.
Repairs intended to restore defective equipment to working order may also qualify as deductible expenses.
Examples include:
However, replacing an entire long-lasting piece of equipment may require capitalization rather than immediate deduction.
Good to know: the tax classification of an expense depends on its actual economic nature. Work described as a repair on an invoice may, depending on its scale, qualify as a depreciable investment.
Certain renovation projects represent long-term investments that significantly improve the accommodation or extend its useful life.
These costs generally need to be recorded as capital assets in the rental activity's accounts and depreciated over several years.
Installing or completely replacing a fitted kitchen may qualify as a depreciable investment.
Built-in cabinets, appliances and installations may require different accounting treatments depending on their nature.
A complete bathroom renovation involving the replacement of sanitary fittings, surfaces and equipment may also need to be capitalized.
By contrast, an isolated repair may be recorded as an expense.
Major improvements designed to sustainably increase a property's energy efficiency may qualify for depreciation.
Depending on the nature and scale of the work, examples include:
These improvements can provide two benefits: improving the property's comfort and helping increase its attractiveness in the rental market.
Substantial work affecting the roof, building structure or certain long-lasting building systems may also need to be capitalized.
The depreciation period depends on the components involved and their estimated useful lives.
Construction, reconstruction and extension work generally does not qualify as routine maintenance that can be deducted immediately.
Examples include:
Such work results in lasting changes to the property.
Under the LMNP actual expenses regime, these costs may nevertheless be capitalized and depreciated, depending on the applicable accounting rules.
It is therefore important to distinguish between an expense that cannot be deducted immediately and one that receives no tax treatment at all.
For substantial renovation work, consulting a qualified accountant can help determine the appropriate accounting treatment.
| Type of work | General tax treatment |
|---|---|
| Routine repainting | Deductible expense |
| Repairing a water leak | Deductible expense |
| Servicing a boiler | Deductible expense |
| Repairing an electrical installation | Deductible expense |
| Complete kitchen renovation | Depreciation |
| Major bathroom renovation | Depreciation |
| Installing a heat pump | Depreciation |
| Major thermal insulation work | Depreciation |
| Complete window replacement | Depreciation |
| Building an extension | Capitalization and possible depreciation |
Please note: this table provides illustrative examples. The final tax classification depends on the actual nature and extent of the work and the applicable accounting rules.
Yes. Certain expenses incurred before the first tenancy may be taken into account in the accounts of an LMNP rental activity, subject to specific conditions.
In particular, it must be possible to demonstrate that these expenses are directly connected with preparing the property for rental.
The accounting treatment depends on the nature of the expenses and when they were incurred.
For example, restoration work may, in some circumstances, be recorded as an expense. Conversely, long-term investments or work included in the acquisition cost or the cost of bringing the property into use may need to be capitalized.
To substantiate these expenses, landlords should retain invoices, proof of payment and documents establishing their connection with the rental activity.
Important: work carried out before the rental activity begins requires particular attention. The fact that it was completed only a few months before the first tenancy does not automatically make it tax-deductible.
Furnished rentals require landlords to provide accommodation with the equipment necessary for everyday living.
The purchase of this equipment may also be taken into account in the rental activity's accounts.
Items expected to be used for several years are generally capitalized and depreciated.
Examples include:
The depreciation period depends on the type of asset and its expected useful life.
Certain low-value items may, subject to conditions, be recorded directly as deductible expenses.
It is advisable to have their accounting treatment reviewed to avoid mistakes.
Renovation work is not the only type of expenditure that may reduce taxable profits from furnished rentals.
Under the actual expenses regime, several costs may be deductible when genuinely incurred for the rental activity.
These may include:
Eligibility for deductions depends on the nature of the expenses and their accounting treatment.
Taking these costs into account can significantly reduce the rental activity's taxable profits.
Tax reporting obligations differ according to the applicable tax regime.
The landlord declares gross rental receipts in accordance with the procedures established by the French tax authorities.
The applicable standard tax allowance is then applied to the rental activity.
Landlords cannot separately deduct renovation invoices, maintenance costs or furniture purchases.
The landlord must maintain accounting records that distinguish between current expenses, capital assets and depreciation.
In particular, they must prepare professional income tax return form 2031 and the relevant tax schedules, then report the required information on supplementary income tax form 2042-C-PRO.
Invoices and supporting documents must be retained in case the French tax authorities request them.
Using a qualified accountant is particularly recommended when the rental activity involves major renovations or several depreciable investments.
When deductible expenses exceed furnished rental receipts, the activity may generate a tax loss.
Under Non-Professional Furnished Rental Landlord status, this loss cannot be deducted from the household's other income, such as salaries.
However, it may be carried forward against profits from non-professional furnished rental activities for the following ten years, subject to the applicable rules.
No. Tax-deductible depreciation cannot create or increase a tax loss from furnished rentals.
When depreciation exceeds the available profit after deducting other expenses, the unused amount may be carried forward under the specific rules governing depreciation.
This distinction is important: carrying forward tax losses and carrying forward unused depreciation are subject to different mechanisms.
Since the tax reform introduced in 2025, depreciation deducted under Non-Professional Furnished Rental Landlord status is generally taken into account when calculating real estate capital gains upon selling the property.
In practice, depreciation previously deducted may reduce the acquisition price used for tax purposes, thereby increasing the taxable capital gain.
Certain circumstances and property categories are subject to specific rules.
This change should be considered when planning a property investment.
Depreciation remains a potentially valuable tax mechanism during the rental period, but its overall effect must now also be assessed in light of the taxation applicable upon resale.
Several good practices can help landlords manage the taxation of renovation work carried out on furnished rental properties.
The choice between micro-BIC and the actual expenses regime depends on factors including rental receipts, expenses incurred and investments to be depreciated.
When a landlord plans major renovation work, the actual expenses regime may be particularly attractive.
However, both regimes should be compared in light of the owner's overall tax situation.
Preparing renovation projects in advance makes it easier to estimate costs, completion times and their impact on rental profitability.
It also helps determine the appropriate accounting treatment for different investments.
Every expense must be properly documented.
Landlords are advised to retain detailed invoices, approved quotations, proof of payment and documents relating to renovation work.
An accountant specializing in furnished rentals can help distinguish deductible expenses from capital assets and prepare appropriate depreciation schedules.
Professional assistance can also help landlords anticipate the long-term tax consequences of their investments.
Specializing in furnished rentals and rental property management, Lodgis supports landlords with renting out their properties and maximizing the value of their real estate assets.
Whether you have just purchased an apartment or want to rent out your property again after renovation work, our teams can advise you on its position in the rental market and the services best suited to your project.
Thanks to its real estate market expertise, Lodgis assists you with finding tenants and, depending on the package selected, managing your accommodation on a daily basis.
Would you like to rent out your furnished apartment? Contact the Lodgis team for personalized assistance.
Under the actual expenses regime, maintenance and repair costs can generally be deducted when they meet the applicable tax requirements. Major investments generally need to be capitalized and depreciated.
Yes. Painting and decorating work involving routine maintenance or restoring a property to good condition can generally qualify as deductible expenses. However, the treatment may differ if the work forms part of a major renovation project that must be capitalized.
A complete kitchen renovation generally qualifies as a depreciable investment. By contrast, an isolated repair may be recorded as an expense depending on its nature.
Certain expenses incurred before the first tenancy may be taken into account if they are directly connected with the rental activity. Their treatment depends on their nature, timing and the applicable accounting rules.
No. The micro-BIC regime provides a standard allowance to account for expenses. Actual costs cannot be deducted individually.
The depreciation period depends on the nature of the work and the expected useful life of the relevant components. It should be established through an appropriate and consistent depreciation schedule.
Materials and supplies may, subject to conditions, be taken into account when purchased for the rental activity and properly documented.
However, landlords cannot assign a tax-deductible value to their own labor as though it were a service invoiced by a contractor.
They may be recorded as deductible expenses or capitalized and depreciated, depending on their nature and scale.
Major energy efficiency renovations generally require capitalization when they provide lasting improvements to the property.
The tax treatment of renovation work under Non-Professional Furnished Rental Landlord (LMNP) status is based on an essential distinction between immediately deductible expenses and depreciable investments.
Maintenance and repair costs may directly reduce the rental activity's taxable profits, while more substantial improvements generally need to be depreciated over several years.
For landlords, understanding these mechanisms helps anticipate expenses, ensure accurate tax reporting and better manage the profitability of their property investments.
Before undertaking major renovation work, it is advisable to confirm the appropriate tax treatment with a professional and choose the tax regime best suited to your circumstances.
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