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Professional furnished rental company: the status of rental investors explained by your Lorient concierge

Find out all about the status of professional furnished rental company thanks to your Lorient concierge

If you are considering investing in rental property, it is essential to understand the different statuses available to you. The different possible tax regimes for rental investors depend essentially on your situation. They each offer their share of advantages and disadvantages and are an essential point in the profitability of your property. One of the most advantageous statuses is that of professional furnished rental company (LMP). This very advantageous tax regime is applicable to certain individuals who meet the required conditions. Your Lorient Concierge explains to you what the status of professional furnished rental company is and how to obtain it. 

Who is affected by this status

To be able to benefit from the status of professional furnished lessor, you must, as rental investors, meet two conditions: 

  • The rental income of your accommodation must be greater than 23 euros per year (this includes rent, taxes, but also charges collected). This amount is calculated for the entire tax household. In case of interruption during the year, a pro rata is made.   
  •  Rental income should be the major source of household income. That is to say, they must exceed the cumulative total of other tax household income such as wages or other. 

This status mainly concerns investors who are dedicated to furnished rentals as their main activity. This may include investors who present several furnished rental properties or tourist residences. The status of professional furnished lessor offers attractive tax advantages and is always determined in relation to the tax household of the lessor owner. 

Good to know: the lessor recognized as a professional is not obliged to register with the trade and companies register. In addition, renting a Bed and Breakfast cannot claim this status, because it includes services. It is therefore considered to fall under the tax regime for supplementary accommodation and not for furnished rentals. 

The advantages of the status of professional furnished rental company

Whether you are considered an LMP or a non-professional furnished rental company (LMNP), your status gives you the choice between different tax regimes. Income from furnished rentals is taxed in the category of industrial and commercial profits (BIC). This means that location-related charges, such as management fees, notary fees and loan interest, are deductible from rental income. Depending on the amount of your income, you can decide to take the micro-BIC diet or the real diet. Given their charges, the professional furnished rental company is more often registered with the real regime. There are then two scenarios: 

  • Revenues generated by rentals are lower than accrued expenses. The deficit will then be directly deducted from the owner's overall income. This levy thus allows a reduction in taxes. 
  • Rental income exceeds expenses. The depreciation of your accommodation (calculated over 20 years) will be deducted from your income. The amount of your rents will be considered equal to zero. Your rental income will therefore be net of tax. 

Good to know: thanks to the LMP status, you are recognized as being a real estate professional. You will therefore be exempt from the IFI (real estate wealth tax replacing the ISF since 2018). 

Plus, LMNP status arguably reveals one of its biggest advantages when selling your rental property. Indeed, you will have the possibility of obtaining a tax exemption on your capital gains if your rental income does not exceed €90/year in the two years preceding the sale. If this threshold is exceeded, you can still obtain a partial exemption from the capital gain if you remain below €000/year of rental income. 

Take advantage of LMP status with your Lorient concierge

YourHostHelper supports individuals and professionals in their rental real estate project. While we've already explained the benefits of LMNP status to you, it's up to you to decide which plan is best for you. Be aware, however, that if you meet the two conditions required by the status of professional furnished rental company, this status will be automatically granted to you. 

Your Lorient concierge is committed to supporting you in your efforts to free you from your rental management. We combine all your expenses in a single service covering all of your needs and those of your tenants. Trust YourHostHelper to delegate the management of your real estate and make the most of your accommodation through seasonal rentals. Whatever your status, we discuss your objectives with you and work to carry out your professional projects. 

The status of professional furnished rental company offers many advantages for rental investors. Automatically granted if your situation meets its criteria, this status allows you to benefit from very advantageous taxation. Tax reduction up to the full amount deducted, exemption on capital gains in the event of sale, the LMP status is a very good opportunity for all owners wishing to embark on a more professional way in furnished rentals. Your Lorient concierge is there to provide you with the necessary information and support you in the management of your rental properties, even as professionals. Maximize your tax benefits with LMP status and benefit from premium support for managing your rentals.