Micro-BIC LMNP 2026: allowance, thresholds and comparison with the actual-expenses regime
In short
The LMNP micro-BIC applies a flat 50% allowance on furnished rents (30% for non-classified tourism lets), with no receipts or bookkeeping, as long as revenue stays under €77,700/yr. It is simple but often less advantageous than the real regime once your expenses and depreciation exceed 50% of the rent.
The micro-BIC LMNP regime is the simplest way to declare furnished rental income. It applies automatically if your annual receipts remain below the statutory thresholds, and it provides a flat 50% allowance on all your rental income — with no requirement to justify individual charges. But this simplicity comes at a price: the actual-expenses regime (régime réel) is almost always more advantageous as soon as you have a mortgage.
What is the micro-BIC LMNP regime?
The micro-BIC is the simplified taxation regime for industrial and commercial profits (bénéfices industriels et commerciaux). For a non-professional furnished landlord (Loueur Meublé Non Professionnel — LMNP), it is the default regime provided your annual receipts from furnished letting do not exceed the statutory thresholds.
It rests on a straightforward principle: you declare the total gross rent received, and the tax authority applies a flat allowance representing your charges. No bookkeeping is required, and no supporting documentation for charges need be provided.
Taxable base under micro-BIC:
// Micro-BIC LMNP calculation
taxable_base = gross_annual_rent × 0.50
tax = taxable_base × (TMI + 0.172)
// TMI = marginal tax rate (TMI): 11%, 30%, 41%, 45%
2026 thresholds: when does the actual-expenses regime become compulsory?
| Type of letting | Allowance | Micro-BIC threshold 2026 |
|---|---|---|
| Standard long-term furnished rental | 50% | €77,700/year |
| Classified furnished tourist let | 50% | €77,700/year |
| Non-classified furnished tourist let | 30% | €15,000/year |
Worked example: micro-BIC vs actual-expenses regime for a mortgaged flat
Assumptions: flat purchased for €200,000, rent €950/month (€11,400/year), 20-year mortgage with €7,000 interest in year 1, actual charges €4,200/year, building depreciation (€170,000 ÷ 30 years = €5,667) + furniture depreciation (€8,000 ÷ 7 years = €1,143) = €6,810/year, marginal tax rate (TMI) 30%.
| Tax calculation | Micro-BIC | LMNP actual-expenses |
|---|---|---|
| Gross annual rent | €11,400 | €11,400 |
| Allowance / deductible charges | − €5,700 (50%) | − €18,010 (charges + interest + depreciation) |
| Taxable base | €5,700 | €0 (floored at 0) |
| Income tax (TMI 30%) | €1,710 | €0 |
| Social charges (prélèvements sociaux, 17.2%) | €980 | €0 |
| Total annual tax | €2,690 | €0 |
The LMNP actual-expenses regime saves €2,690/year in tax here — that is €26,900 over 10 years. This is the typical scenario: as soon as there is a mortgage with meaningful interest payments, the deductible actual charges (interest plus depreciation) represent well over 50% of rental income.
When micro-BIC remains relevant
The micro-BIC regime retains merit in three situations:
- Property purchased outright (no mortgage). Without mortgage interest, the total actual charges may remain below 50% of rental income. Example: €11,400 in rent, charges of €3,500 = 30.7% of rent. The 50% allowance is then more generous.
- Fully paid-off investment. Once the mortgage is repaid, interest falls to zero and depreciation (amortissements) has been progressively exhausted (deferred depreciation — ARD — consumed). The actual-expenses regime may become less advantageous.
- Simplicity is the absolute priority. No bookkeeping, no tax return form 2031, no accountancy fees (€300–€600/year for LMNP actual-expenses). For a first-time investor with a secondary property let occasionally, micro-BIC may be perfectly adequate.
How to switch from micro-BIC to the actual-expenses regime
Electing the actual-expenses regime is an annual, voluntary step. It allows you to opt for the actual-expenses basis even if you are below the €77,700 threshold.
For income in year N: the election must be made before 1 February of year N (or at the time of your first return if you are just starting out). It is valid for a minimum of 2 years and is renewed by tacit agreement. Reverting to micro-BIC is possible at the end of this period by simply not renewing the election.
In practice, if you use an accountant or a tax software package, electing the actual-expenses regime is done directly on form 2042-C-PRO when filing your income tax return.
Micro-BIC and social charges (prélèvements sociaux)
Micro-BIC LMNP income is subject to social charges (prélèvements sociaux) at a rate of 18.6% since the LFSS 2026 (the amendment applies to non-professional BIC income — previously 17.2%).
Full micro-BIC LMNP tax formula:
total_tax = rent × 0.50 × (TMI + 0.186)
Example at TMI 30%: rent €11,400 → tax = 11,400 × 0.50 × (0.30 + 0.186) = €2,770
Micro-BIC and capital gains tax
The sale of a property held under LMNP (whether micro-BIC or actual-expenses) falls under the private individuals' capital gains regime (Article 150 U et seq. of the General Tax Code — CGI). Progressive taper relief applies: full income tax exemption after 22 years of ownership, full social charges exemption after 30 years.
Under micro-BIC, no depreciation (amortissements) has been deducted — the capital gains base therefore remains the acquisition price plus associated costs (notary fees, agency fees). The depreciation add-back introduced by the Finance Act 2025 (LFI 2025) does not apply to micro-BIC, since no depreciation has been claimed.
What RentValo calculates for micro-BIC
In the RentValo simulation, the micro-BIC calculation includes:
- Micro-BIC tax for each marginal tax rate (TMI): 0%, 11%, 30%, 41%, 45%
- A direct comparison of micro-BIC versus LMNP actual-expenses using your mortgage and charges
- The switchover threshold to the actual-expenses regime (the level of actual charges above which the actual-expenses regime becomes more advantageous)
- Capital gains tax at 10 years, 20 years, and at the end of the mortgage term
FAQ
Can mortgage interest be deducted under the micro-BIC LMNP regime?
No. Under micro-BIC, the 50% allowance is a flat rate that replaces all actual charges. No individual deductions (interest, works, depreciation) are permitted. If your actual charges exceed 50% of your rental income, the actual-expenses regime (régime réel) will be more advantageous.
Is the micro-BIC allowance 50% or 71% in 2026?
50% for standard long-term furnished rentals. The 71% allowance for classified tourist lets was abolished by the Finance Act 2024 (art. 45), applicable to income from 2024 onwards — it no longer exists. In 2026, the applicable rate is 50% for both classified and non-classified lets (though non-classified lets have a €15,000 threshold, above which the actual-expenses BIC regime becomes compulsory).
Can you switch from micro-BIC to the actual-expenses regime mid-year?
No. A change of regime applies to the full tax year and must be made by express election before 1 February of the relevant year (or at the time of your first return if you are just starting out). The election is valid for 2 years and is renewed by tacit agreement.
Which regime suits a first-time furnished rental investor?
It depends on your situation. Micro-BIC is simpler (no bookkeeping required), but the actual-expenses regime is almost always more tax-efficient if you have a mortgage (interest plus depreciation typically reduces taxable profit to zero). Simulate both on RentValo for your specific circumstances.
Are service charges (charges de copropriété) deductible under micro-BIC?
No. The 50% flat allowance covers all charges in full. No individual deductions are possible under micro-BIC.
In summary
- 50% flat allowance on gross rental income, with no requirement to justify charges
- Threshold of €77,700/year for standard furnished rentals and classified tourist lets
- Tax = rent × 0.50 × (TMI + 18.6%)
- No deduction of mortgage interest or depreciation — the actual-expenses regime is almost always more advantageous if you have a mortgage
- Simple but costly for landlords with significant debt
Micro-BIC or actual-expenses: which one truly benefits you?
RentValo calculates both regimes for your property in 30 seconds.
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