Micro-foncier or actual-expenses regime: how to choose in 2026?
In short
For an unfurnished rental, micro-foncier gives a flat 30% allowance (if rents ≤ €15,000/yr) whereas the real regime deducts actual expenses and allows the déficit foncier. The real regime becomes more advantageous once your deductible expenses exceed 30% of the rent (major works, high loan interest).
For a landlord letting a property unfurnished, choosing between the micro-foncier regime and the actual-expenses regime (régime réel foncier) is one of the first tax decisions to make. Micro-foncier is straightforward: a flat 30% allowance with no bookkeeping required. The actual-expenses regime is more complex but allows you to deduct real charges — and often to pay considerably less tax. The decision rule is more precise than most people realise.
The decision rule in one sentence
If your real deductible charges represent more than 30% of your gross rent, the actual-expenses regime is more advantageous.
That is all there is to it. The comparison comes down to this tipping point. With a mortgage, this is almost always the case — loan interest alone frequently exceeds 30% of rent in the early years.
Which charges are deductible under the actual-expenses regime?
Under the actual-expenses regime (régime réel foncier), you may deduct the following charges (art. 31 of the General Tax Code — CGI):
- Loan interest (mortgage and works loan)
- Property tax (taxe foncière) (excluding the household waste collection levy — TEOM — which is recoverable from the tenant)
- Non-occupying landlord insurance (assurance PNO)
- Service charges (charges de copropriété) (provisions and year-end adjustments)
- Letting management fees (estate agent or property manager)
- Rent guarantee insurance (GLI — Garantie Loyers Impayés)
- Letting fees (agent fees for finding a tenant, mandatory property surveys)
- Maintenance and repair works (but not construction, extension or reconstruction works)
- Legal costs (solicitor, bailiff in the event of unpaid rent)
Worked comparison: 3 typical profiles
Profile 1 — Investor without a mortgage, low charges
Rent €10,000/year, real charges €2,400 (24% of rent), marginal tax rate (TMI) 30%.
| Micro-foncier | Actual-expenses regime | |
|---|---|---|
| Gross rent | €10,000 | €10,000 |
| Deduction | − €3,000 (30% flat allowance) | − €2,400 (real charges) |
| Taxable base | €7,000 | €7,600 |
| Total tax (TMI 30% + social charges 17.2%) | €3,304 | €3,587 |
| Optimal regime | ✅ Micro-foncier |
Real charges < 30% → micro-foncier is marginally better.
Profile 2 — Investor with a mortgage, average profile
Rent €12,000/year, loan interest €3,800, property tax €1,100, insurance €250, service charges €600, total charges €5,750 (47.9%), TMI 30%.
| Micro-foncier | Actual-expenses regime | |
|---|---|---|
| Gross rent | €12,000 | €12,000 |
| Deduction | − €3,600 (30% flat allowance) | − €5,750 (real charges) |
| Taxable base | €8,400 | €6,250 |
| Total tax (TMI 30% + social charges 17.2%) | €3,964 | €2,948 |
| Saving with actual-expenses regime | €1,016/year |
Profile 3 — Investor with a large mortgage and significant works
Rent €12,000/year, loan interest €4,500, property tax €1,000, insurance €300, service charges €600, works €3,000, total €9,400 (78.3%), TMI 41%.
| Micro-foncier | Actual-expenses regime | |
|---|---|---|
| Gross rent | €12,000 | €12,000 |
| Deduction | − €3,600 (30%) | − €9,400 (real charges) |
| Taxable base | €8,400 | €2,600 |
| Total tax (TMI 41% + social charges 17.2%) | €4,906 | €1,517 |
| Saving with actual-expenses regime | €3,389/year |
Déficit foncier: the exclusive advantage of the actual-expenses regime
If your real charges exceed your gross rent, you generate a déficit foncier (rental property loss carry-forward). This is impossible under micro-foncier (the flat allowance always produces a positive result) but possible — and highly effective — under the actual-expenses regime.
The déficit foncier works as follows (art. 156 CGI):
- The portion of the deficit excluding loan interest is deductible against your global income up to a limit of €10,700/year — directly reducing your income tax
- This cap is raised to €21,400 where the works enable the property to move from energy performance certificate (DPE) class E, F or G to A, B, C or D — valid until 31/12/2027
- The portion attributable to loan interest (and any excess above the cap) is carried forward against rental income over the following 10 years
Example of déficit foncier set-off:
Global income (salary): €50,000. Déficit foncier: €8,000 (of which €6,000 excluding interest). TMI 30%.
| Global income before déficit | €50,000 |
| Set-off of déficit excl. interest (capped at €10,700) | − €6,000 |
| Taxable global income | €44,000 |
| Income tax saving (TMI 30%) | €1,800 |
Full comparison
| Micro-foncier | Actual-expenses regime | |
|---|---|---|
| Eligibility conditions | Gross income ≤ €15,000/year | Always available (by election) |
| Allowance | 30% flat rate | Real deductible charges |
| Loan interest | Included in the 30% | Fully deductible |
| Property tax (taxe foncière) | Included in the 30% | Deductible |
| Works | Included in the 30% | Deductible (maintenance and repair) |
| Déficit foncier | Not possible | Possible (deductible against global income, cap €10,700) |
| Tax return | Box 4BE of form 2042-C | Form 2044 + 2044-SPE |
| Bookkeeping | None | Charge receipts must be kept |
| Accountant | Not required | Recommended if multiple properties |
| Election period | — | Irrevocable for a minimum of 3 years |
| Optimal when… | Real charges < 30% of rent | Real charges > 30% of rent |
How to switch to the actual-expenses regime
Switching to the actual-expenses regime is an election to be made each year when filing your income tax return. In practice:
- Tick the box electing the actual-expenses regime on your tax return
- Complete form 2044 (actual rental income declaration) — and form 2044-SPE if you benefit from special schemes (Malraux, Monuments Historiques, etc.)
- Keep all supporting documents for your charges (receipts, invoices, property tax notices)
FAQ
Can I use the actual-expenses regime if I am below the €15,000 threshold?
Yes. The actual-expenses regime (régime réel foncier) is optional, even if your gross rental income is below €15,000/year. The election is made on your income tax return and is irrevocable for 3 years.
How do I work out whether the actual-expenses regime is more advantageous for me?
Add up all your deductible real charges (loan interest, property tax (taxe foncière), landlord insurance (PNO), service charges (charges de copropriété), management fees, rent guarantee insurance (GLI), letting fees, maintenance works). If that total exceeds 30% of your gross rent, the actual-expenses regime will be more advantageous.
Is the election to the actual-expenses regime irrevocable?
Yes, for 3 years. After those 3 years, if you do not renew the election and your income remains below €15,000, you automatically revert to the micro-foncier regime.
Can you create a déficit foncier under the micro-foncier regime?
No. Under micro-foncier, the 30% allowance is flat-rate — the result is always positive or nil. Only the actual-expenses regime can produce a déficit foncier (rental property loss carry-forward) that is deductible against global income.
Do I need an accountant for the actual-expenses regime?
No, it is not compulsory. However, it is recommended if you own several properties or have significant works expenditure. Form 2044 is more complex than the single box 4BE used for micro-foncier.
In summary
- Micro-foncier: simple, automatic below €15,000, 30% flat allowance — optimal only if your real charges remain below 30% of your rent
- Actual-expenses regime (régime réel foncier): deduction of real charges (interest, works, property tax…) — almost always more advantageous with a mortgage
- Tipping point: real charges > 30% of rent → actual-expenses regime wins
- Déficit foncier (rental property loss carry-forward): only available under the actual-expenses regime — deductible against global income up to €10,700/year (€21,400 for qualifying energy renovation works)
- The actual-expenses election is irrevocable for 3 years — plan ahead
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