Difference between a professional furnished rental company (LMP) and a non-professional furnished rental company (LMNP)

You are starting your activity as a rental company and you would like to know more about the status of furnished rental company.

What is the difference between a professional furnished rental company (LMP) and a non-professional furnished rental company (LMNP)?

The amount of annual rent generated by the rental determines the LMP or LMNP status of the lessor:

• Less than €23,000: LMNP

• above €23,000: LMP

Exceeding the threshold does not necessarily result in a transition to professional status. If income from furnished rentals does not constitute the main source of income of the tax household (< 50 %), the LMNP status may be retained.

As an LMNP, deficits generated by your rentals can be deducted from your rental income for a period of 10 years. In LMP, this period is reduced to 6 years, but you can deduct your deficits from the entire income of your tax household!

The LMP can benefit from an exemption from capital gains on total transfer when the rental income is less than 90 000 € excluding taxes (HT) during the 2 calendar years preceding the transfer. The furnished rental activity must also have started at least 5 years ago.

The exemption is partial in the case where these revenues are between 90 000 € and 126 000 € Excl. tax.

The other obligations of a furnished rental company are described in our article previous.