By Camille Laurent — October 31, 2026
The tax shock facing French vacation rental owners
Operating a short-term rental in France produces attractive revenue, but French tax rules quickly surprise unprepared investors. Under the default Micro-BIC regime, you pay income tax and 17.2% social charges on a high percentage of your gross receipts.
With the adoption of the Loi Le Meur, unclassified vacation rentals (meublés non classés) receive only a flat 30% expense deduction, capped at €15,000 in gross annual rent. While obtaining an official 1 to 5-star rating preserves a 50% allowance up to €77,700 (as detailed in our Meublé de Tourisme Rating Guide), you are still taxed on half of every euro collected.
For an investor carrying a mortgage, renovation bills, property management fees, and cleaning costs, paying taxes on 50% or 70% of gross revenue makes little sense. This is where the non-professional furnished rental actual regime (LMNP au régime réel) changes everything. By deducting real operating costs and non-cash property depreciation (amortissement comptable), you can shelter your rental income from French taxes for over a decade.
How component depreciation shelters short-term rental income
Under French tax law (article 39 C of the Code Général des Impôts), property owned under LMNP is broken down into separate components with distinct lifespans:
- Land allocation (Terrain): Roughly 15% to 20% of the purchase price represents land value. Because land does not lose value through wear, this portion cannot be depreciated.
- Main structure (Gros œuvre): Represents 45% to 50% of the building value, depreciated over 40 to 50 years (~2% to 2.5% annually).
- Roofing and façade (Façade et toiture): Represents 10% to 15% of the value, depreciated over 20 to 25 years (~4% to 5% annually).
- Internal fittings and electrical (Agencements): Represents 15% to 20% of the value, depreciated over 15 to 20 years (~5% to 6.6% annually).
- Furniture and appliances (Mobilier): 100% of the furnishing pack is depreciated over 5 to 10 years (10% to 20% annually).
Accounting depreciation is a non-cash paper deduction. You do not pay out this cash each year; instead, tax rules allow you to deduct the physical aging of the asset against guest revenues.
Deductible operating expenses: what you can write off
In addition to component depreciation, the régime réel lets you deduct 100% of legitimate operating expenses:
- Mortgage interest: Bank interest, loan fees, and mortgage insurance premiums (assurance emprunteur).
- Property taxes: Municipal property tax (taxe foncière), excluding household waste collection (TEOM).
- Booking commissions: Platform fees charged by Airbnb, Booking.com, and payment processors.
- Maintenance and cleaning: Professional turnover cleanings, laundry, and repairs.
- Utilities and internet: Electricity, water, heating, and fiber broadband.
- Amenity upgrades: Capital investments in guest amenities, such as an outdoor hot tub (modeled in our Airbnb Hot Tub ROI Guide), depreciated over 7 to 10 years.
- Accounting fees: Fees paid to a chartered accountant (expert-comptable), two-thirds of which are returned as a direct tax credit via an approved management body (CGA).
Real-world comparison: Micro-BIC vs LMNP Réel on a €42,000 rental
Consider an individual vacation house acquired for €230,000 with €20,000 in furniture, generating €42,000 in gross annual Airbnb revenue:
| Financial Element | Micro-BIC (Unclassified 30%) | Micro-BIC (Classified 50%) | LMNP Régime Réel |
|---|---|---|---|
| Gross Annual Revenue | €42,000 | €42,000 | €42,000 |
| Flat Tax Abatement | -€12,600 (30%) | -€21,000 (50%) | €0 |
| Deductible Operating Costs | €0 | €0 | -€14,800 |
| Mortgage Interest & Insurance | €0 | €0 | -€5,400 |
| Component Depreciation | €0 | €0 | -€9,600 |
| Taxable Rental Income | €29,400 | €21,000 | €0 |
| Income Tax (30% marginal bracket) | €8,820 | €6,300 | €0 |
| Social Charges (17.2% CSG/CRDS) | €5,057 | €3,612 | €0 |
| Total Annual French Tax Bill | €13,877 | €9,912 | €0 |
Under the régime réel, the investor pays €0 in taxes instead of paying €9,912 or €13,877. Even better, unused accounting depreciation never expires: it is stored in a deferred pool (amortissements réputés différés) to offset rental profits in future years.
Practical roadmap to file under the régime réel
- Obtain your SIRET: File Form POi with INPI within 15 days of your first booking.
- Elect the régime réel: Send your election letter to your local tax office (SIE) before May 18.
- Isolate rental cashflows: Use a dedicated bank account for rental revenues and expenses.
- Partner with a specialized accountant: A certified accountant files your annual tax package (Forms 2031/2033) with DGFiP.
Related Guides
- Buying an Airbnb House in France: Complete Acquisition Guide — How to evaluate energy ratings, analyze DVF prices, and model seasonal cashflows.
- Meublé de Tourisme Rating Guide — How star classification preserves your tax rights and reduces municipal tourist taxes.
- Airbnb Hot Tub ROI Guide — Upfront installation costs, electricity consumption, and winter occupancy gains.
Ready to model tax regimes and simulate 12-month net cashflows for your next property acquisition? Explore our full analysis engine on How It Works, or start your free 14-day trial on our Pricing page.