42 definitions
All key definitions for analysing a rental investment — with average data observed on RentValo.
Monthly difference between the rent collected and every cash outgoing (loan instalment, landlord expenses, tax). A positive cashflow means the property fully funds itself with no additional monthly contribution. A negative cashflow corresponds to a monthly savings effort.
RentValo median: −€120/month including the loan.
(Annual rent / Total purchase price) × 100. Takes neither expenses nor tax into account. It is the first-pass screening indicator for comparing properties quickly, but it does not reflect the real return.
Average observed on RentValo: 5.8% gross across all cities.
The discount rate at which the NPV over the holding period is zero. It incorporates the annual net cashflows and the estimated resale proceeds. It allows rental property to be compared with other investments (PEA, SCPI, Livret A).
An IRR above 8% over 20 years is considered excellent. RentValo median: 6.2%.
The mechanism by which borrowing amplifies the return on equity. Leverage is positive when the asset's rate of return exceeds the cost of the loan. It amplifies potential losses just as much as gains.
On RentValo, the IRR on the down payment exceeds the all-cash IRR by 1.8 points on average thanks to leverage.
The monthly amount the investor has to pay out to cover the shortfall between the rent collected and total costs (loan + landlord expenses + tax). It is the real monthly “contribution” the investment requires.
RentValo median: €180/month. Zero or negative (savings generated) for 22% of simulations.
Yield after deducting landlord expenses: property tax (taxe foncière), non-recoverable service charges, landlord insurance (PNO), management fees, rent guarantee insurance (GLI) and maintenance. It does not yet account for tax.
Average observed on RentValo: 4.2% net.
Yield after expenses AND tax. It varies with the tax regime chosen. Under LMNP réel it can stay close to the net yield throughout the depreciation period, because tax is often nil.
Average net → net-net gap observed on RentValo: 0.8 to 1.5 points depending on the regime.
The sum of future cashflows discounted at the benchmark investment rate chosen by the investor (3 to 8%). If the NPV is positive, the investment outperforms the alternative chosen as the benchmark.
Default discount rate on RentValo: 3% (conservative benchmark). Adjustable up to 8%.
Under LMNP réel, when depreciation exceeds the result net of expenses, the excess cannot create a furnished-letting BIC deficit. It is then carried forward indefinitely against future furnished-letting profits. ARD reduce taxation in the years when rent rises or expenses fall.
ARD often build up at the start of an investment and allow several years of nil taxation as rental income ramps up.
→ Read the full guideThe tax category covering furnished letting income (LMNP, LMP) and short-term lets, as opposed to the property income (revenus fonciers) of unfurnished letting. BIC come with two regimes: micro-BIC (flat-rate allowance) and réel BIC (deduction of actual expenses and depreciation).
Standard furnished micro-BIC threshold: €77,700/yr of receipts for 2025 income, €83,600/yr for 2026 income. Above that, the réel regime becomes mandatory.
→ Read the full guideUnder the réel regime for unfurnished letting, if deductible expenses exceed the rent, the deficit is offset against total income up to €10,700/yr (raised to €21,400 for energy renovation E→D until 2027). The surplus is carried forward against property income for the following 10 years.
Available from around €2,500 of expenses in excess of rent. Directly affects the marginal income tax bracket.
→ Read the full guideA tax incentive scheme for buy-and-renovate purchases in eligible towns (run-down areas, official list). Income tax reduction of 12% (6 years), 18% (9 years) or 21% (12 years) of the cost price. Cap of €300,000.
Maximum income tax saving: €63,000 (21% × €300,000) over 12 years.
→ Read the full guideThe annual accounting of a property's loss of value, which reduces taxable profit with no cash outflow. In furnished letting (LMNP réel, SCI IS), the building excluding land is depreciated over 30 years (~3.33%/yr) and the furniture over 7 years (~14.3%/yr). It is the main tax advantage of LMNP réel.
Average annual depreciation for a T2 (one-bedroom) flat at €200,000: ~€5,600/yr (building + furniture).
→ Read the full guideAn annual tax on net property assets above 1.3 million euros as at 1 January. It applies to individuals and covers property assets only (homes, rental property, unlisted SCPI). The main residence benefits from a 30% allowance.
IFI threshold for 2026: €1.3M net. Scale from 0.5% to 1.5% by bracket.
The French progressive income tax, calculated by marginal brackets (TMI). Rental income (property income or BIC) is added to the household's other income and taxed at the applicable marginal rate, plus social charges (17.2% for unfurnished letting, 18.6% for non-professional furnished letting).
The 30% bracket applies between €29,580 and €84,577 of net taxable income (2026 scale on 2025 income, one tax share — LF 2026, art. 4).
Tax on company profits, applying in particular to an SCI IS. The reduced rate of 15% applies up to €42,500 of net profit (subject to conditions: turnover < €10M, 75% of the capital held by individuals); then 25% above that.
Example: €20,000 of SCI IS profit → €3,000 of corporate tax at the reduced 15% rate.
→ Read the full guideThe budget act voted each year by the French parliament, setting the tax rules for the following year. It can change the thresholds, allowances and regimes of rental investment. The LFI 2025 notably reformed the taxation of tourist furnished lets and the LMNP capital gain on resale.
The LFI 2025 (provisions applicable from 16/02/2025) introduced the add-back of LMNP réel depreciation into the taxable capital gain on resale.
→ Read the full guideThe tax status for furnished letting whose annual receipts are below €23,000 or below 50% of the household's earned income. Two sub-regimes: micro-BIC (50% allowance) and réel (depreciation of the property and deduction of actual expenses).
The most simulated regime on RentValo (38% of simulations). Median tax saving vs micro-BIC: €1,840/yr under the réel regime.
→ Read the full guideA status acquired automatically if furnished rental receipts exceed €23,000/yr AND represent more than 50% of the household's earned income. Deficits are offset against total income with no cap. Self-employed social contributions (SSI) of ~35% of profit apply in return (an estimate — the real rate varies with the URSSAF situation, flat-rate minimum ~€1,200/yr).
Capital gains exemption possible after 5 years of activity, subject to conditions on receipts.
→ Read the full guideAn income tax reduction in exchange for a moderated rent agreed with the ANAH. Three levels: Loc1 (−15% below market) → 15% income tax reduction, Loc2 (−35%) → 35%, Loc3 (−65%, very social) → 65%.
Open to all private landlords, with no conditions on their own income.
→ Read the full guideA tax regime for tourist furnished lets arising from the revision of the 2024 finance act (applicable in 2026). It provides for depreciation at 4%/yr of the pre-tax cost price and a rent cap of €8/m²/month for short-term lets.
Replaces the 71% allowance abolished by the 2024 finance act for classified tourist furnished lets.
→ Read the full guideThe simplified regime for furnished letting: a 50% allowance on receipts (cap €77,700 for 2025 income, €83,600 for 2026 income). For non-classified tourist furnished lets: 30% allowance, cap €15,000/yr. No deduction of actual expenses or depreciation.
Formula: rent × 50% × (TMI + 18.6%) — social charges on non-professional BIC since the LFSS 2026.
→ Read the full guideThe simplified regime for unfurnished letting: a flat-rate 30% allowance on gross rent. Available if the household's gross property income is below €15,000/yr. No actual expenses deductible.
Formula: rent × 70% × (TMI + 17.2%).
→ Read the full guideA single 30% rate (12.8% income tax + 17.2% social charges) on dividends and investment income. The progressive scale can be opted for instead where more favourable. It applies in particular to dividends paid by an SCI IS.
PFU rate for 2026: 30%.
The taxable gain realised on the sale of a property, calculated as the difference between the sale price and the acquisition price increased by costs. Allowances for the holding period apply: full income tax exemption after 22 years, full social charges exemption after 30 years. Since 16/02/2025, depreciation deducted under LMNP réel reduces the acquisition price used, increasing the taxable gain.
Rate before allowances: 19% income tax + 17.2% social charges = 36.2% of the net gain.
The tax regime in which the property's actual expenses (loan interest, property tax, works, insurance, etc.) are deducted from the rent to calculate tax, in place of a flat-rate allowance. In furnished letting it also allows the property's depreciation to be deducted. Generally more favourable than the micro regime from 40 to 50% of expenses upwards.
The réel regime is mandatory above €15,000 of property income (unfurnished) or €77,700 of furnished receipts (standard BIC).
→ Read the full guideA structure allowing the property to be depreciated, loan interest to be deducted and profits to be retained at the corporate tax rate (15% up to €42,500, 25% above). The option is irrevocable. Dividends distributed to the partners are taxed under the PFU (30%).
Resale nuance: the corporate-tax capital gain is calculated on the net book value (depreciation effectively deducted), with no allowance for the holding period. Since the LFI 2025 (art. 84), LMNP réel is subject to an add-back too — the historical gap between the two regimes on resale has narrowed.
→ Read the full guideSocial contributions due on investment income and property capital gains. Unfurnished letting and capital gains: CSG 9.2% + CRDS 0.5% + solidarity levy 7.5%. Non-professional BIC (LMNP): CSG raised to 10.6% by the LFSS 2026.
2026 rates: 17.2% (unfurnished letting, capital gains) · 18.6% (LMNP / non-professional BIC). Deductible CSG: 6.8% in both cases.
A flat-rate deduction applied to gross rental income before tax is calculated, with no need to justify actual expenses. The rate depends on the regime: 30% under micro-foncier (unfurnished letting), 50% under standard furnished micro-BIC. It simplifies the tax return by replacing the deduction of actual expenditure.
Example: €10,000/yr of rent under micro-BIC → a taxable base of €5,000 after the 50% allowance.
→ Read the full guideThe tax rate applied to the last euro of taxable income. In France in 2026 the income tax scale has five brackets: 0%, 11%, 30%, 41%, 45%. For rental income, the marginal rate applies on top of social charges (17.2% for unfurnished letting, 18.6% for non-professional furnished letting).
Example: a 30% marginal rate + 17.2% social charges = 47.2% total marginal taxation on each additional euro of property income (unfurnished letting); for non-professional furnished letting: 30% + 18.6% = 48.6%.
The ratio of loan instalments to net monthly income. The regulatory HCSF limit is 35% (insurance included). For a rental investment, banks generally count rental income at 70% in the calculation.
RentValo automatically calculates the debt-to-income ratio with rental income weighted at 70%.
A mortgage arrangement in which capital repayment is pushed back in time. Partial deferral: only the interest and the insurance are repaid during the grace period, the capital remains untouched. Total deferral: nothing is repaid and the interest is added to the capital. Often used during works to limit outgoings before the property is let.
Partial deferral only lightens the instalments temporarily and increases the total cost of the loan.
The amount invested outside the bank loan. It usually covers the notary fees (~7.5% on older property) and a fraction of the price. A larger down payment improves the rate obtained but reduces leverage.
Median down payment simulated on RentValo: 15% of the total purchase price (notary fees included).
An INSEE index published each quarter, used to review rents annually during a tenancy. It tracks consumer prices excluding tobacco and excluding rent. The landlord cannot exceed this index when increasing the rent.
Default rent increase assumption on RentValo: +1.5%/yr.
An A to G rating of a home's energy consumption and greenhouse gas emissions. Energy sieves are progressively banned from being let: class G since 1 January 2025, F from 2028, E from 2034.
RentValo shows a red alert if the DPE class leads to a letting ban before the end of the loan.
A notarial database published by the DGFiP on data.gouv.fr listing every French property transaction over the last 5 years. The reference source for real prices per m² by city, district and property type.
RentValo's main source for prices per m² — data updated quarterly.
Insurance covering the property in the event of a claim (water damage, fire), whether it is empty between two tenancies or let. Widely regarded as essential, and sometimes mandatory in a co-ownership.
Average cost: €150–300/yr. RentValo default value: €200/yr.
An agency's fees for managing the letting: finding a tenant, drawing up the lease, inventories, collecting rent and issuing receipts. These fees are deductible under the réel regime (property income or BIC).
Average rate: 6–10% of rent excluding tax. RentValo default value: 7%.
Buying a property to let in order to receive regular income and build up assets. The rent covers all or part of the loan, reducing the monthly savings effort. It is also a common tax optimisation tool through the LMNP, SCI or déficit foncier regimes.
In France, about 2.3 million individual private landlords declare property income (DGFiP 2024).
The period between two tenants during which the property generates no rent. It directly affects the net yield. Higher for short-term letting (15–25%/yr) than for long-term letting.
RentValo default assumption: 1 month/yr (8.3%) for unfurnished or long-term furnished letting.
The share of building charges borne by the owner and not recoverable from the tenant: major works, managing agent fees, building insurance. They account on average for 20 to 30% of total co-ownership charges.
Automatically included in the net yield calculation on RentValo.
An annual local tax borne solely by the owner (not recoverable from the tenant, except for the TEOM household waste levy). It varies significantly with the municipality and the property's cadastral value.
National range for a T3 (two-bedroom) flat: €800–1,500/yr. RentValo default value: €1,200/yr.
Gross, net and net-net yield, cash flow, IRR, NPV — all glossary metrics calculated automatically for your investment.
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Indicative definitions — do not constitute tax or legal advice. Tax rules may change. Consult a qualified accountant for your situation.
Important notice — RentValo is a property analysis and decision-support tool. The simulations, projections and analyses produced are provided for strictly informational purposes only and do not constitute investment advice within the meaning of Articles L. 321-1 and L. 541-1 of the French Monetary and Financial Code. RentValo is not an investment services provider authorised by the Autorité des marchés financiers (AMF) and does not carry out the activity of Financial Investment Adviser (CIF).
Risks — All property investment involves risks, including partial or total loss of invested capital, void periods, unexpected charges and adverse market movements. Past performance and projected figures displayed do not constitute a guarantee of future results. Market data used (price per m², reference rents, rates, taxation) may change. RentValo cannot be held liable for investment decisions made on the basis of these analyses.
Before any investment decision, we recommend consulting a qualified professional: notary, chartered accountant, AMF-registered wealth management adviser (CGP) or specialist lawyer.