Depreciation in LMNP is an accounting entry that reflects the loss of value of a property and its furnishings over time. Reserved for the actual regime, this mechanism allows for a reduction in the taxable amount of rental income without cash outflow. Since the 2025 finance law, the rules have changed on a crucial point: resale. Understanding the calculation of depreciation and its current limits directly affects the net profitability of an investment in furnished rental.
Reintegration of depreciations into the capital gain: what the 2025 finance law changes
Before 2025, the depreciations deducted during operation had no impact on the calculation of the capital gain on resale. The acquisition price remained intact. This is no longer the case.
Since February 15, 2025, the depreciations applied reduce the fiscal acquisition price. The result: the taxable capital gain mechanically increases, taxed at income tax and social contributions. The allowances for holding duration remain unchanged, but the calculation base is broader.
This reintegration concerns all deducted depreciations, including those applied before 2025, as long as the transfer occurs after February 15, 2025. To properly calculate depreciation in LMNP, this data must now be integrated from the acquisition phase and simulate the fiscal cost at resale.
A notable exception: depreciations related to construction, reconstruction, expansion, or improvement expenses are not reintegrated. This technical distinction should be verified with an accountant, as it can influence the work strategy.
Component depreciation: allocation and durations in furnished rental
Real estate depreciation in LMNP relies on a specific method: the breakdown of the property by component. The principle starts from a simple observation. Not all elements of a building wear out at the same rate. The roof deteriorates more slowly than the electrical installation.
The property is therefore divided into several items, each depreciated over its own estimated useful life. The land, however, is never depreciated: it does not lose accounting value.
The main components and their usual durations
- The structural work (load-bearing walls, foundations) represents the largest part of the value and is depreciated over the longest duration, often several decades
- The roof, waterproofing, and facades fall within intermediate durations, reflecting a renovation cycle shorter than the structure
- The technical installations (plumbing, electricity, heating) and interior fittings are depreciated over shorter durations, as their replacement occurs more frequently
- The furniture (bedding, appliances, kitchen equipment) is depreciated over even shorter durations, generally a few years
The allocation between these items determines the pace at which depreciation charges will reduce the taxable result. A well-calibrated allocation accelerates the deduction in the first years, a period when rental income is often the most taxed.
Calculation of annual depreciation under the actual regime
The calculation follows the linear method. For each component, the annual depreciation charge corresponds to the value of the component divided by its estimated useful life. The result gives a constant annuity over the entire period.
Let’s take a simplified example. A property acquired for a total amount excluding the land portion. The structural work, estimated at half the value excluding land, depreciated over a long duration, generates a modest annuity. The technical installations, estimated at a smaller fraction but depreciated more quickly, generate a proportionally higher annuity relative to their value.
The sum of the annuities of each component gives the total depreciation allocation, deducted each year from rental income. This allocation adds to the classic deductible charges (loan interest, insurance, management fees, property tax) to form the taxable net result.
Deduction limit: no deficit from depreciation
Depreciation cannot create a tax deficit in LMNP. If the depreciation allocation exceeds the result after deducting other charges, the excess can be carried forward indefinitely. It will be applied to the profits of subsequent years.
This rule means that in practice, during the first years of operation (when loan interest is high), part of the depreciations is set aside. It will be used later when borrowing costs decrease and the result before depreciation becomes positive again.
LMNP tax arbitration: actual regime versus micro-BIC
Depreciation only exists under the actual regime. Under micro-BIC, a flat-rate allowance replaces any deduction of charges and depreciations. The choice between the two regimes conditions the entire tax strategy.
The actual regime becomes more advantageous when the total of deductible charges and depreciations exceeds the flat-rate allowance of micro-BIC. This is almost always the case for a property financed by credit with recent furnishings.
- Micro-BIC is suitable for simple situations: property held for a long time, without loans, with few charges, and modest rental income
- The actual regime is necessary as soon as a short loan is taken, work is carried out, or the amount of furniture is significant
- Switching from micro-BIC to actual is possible at the beginning of the fiscal year, but returning to micro-BIC requires staying there for a minimum duration
With the reintegration of depreciations into the capital gain since 2025, arbitration is no longer limited to comparing regimes during the operating phase. The planned holding duration and the resale scenario weigh as much as the annual tax savings.
The calculation of depreciation in LMNP remains a powerful tax lever to reduce taxation on rental income. The 2025 reform has altered the overall balance. An investor entering furnished rental today should simulate not only the annual deduction but also the fiscal overcost at resale before finalizing their component allocation and regime choice.