IN BRIEF
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The project of finance law 2025 introduces significant changes for non-professional furnished rental companies. One of the central proposals is to review the way in which capital gains are calculated by integrating depreciation into the acquisition price upon sale of the assets. In addition, the revenue threshold to benefit from LMNP status could be increased by €23,000 to €30,000, thus offering better protection against the aspiration of small rentals. These measures aim to balance the tax landscape and maintain the attractiveness of LMNP status compared to other forms of rental.
Budget 2025: Analysis of the first proposals for non-professional furnished rental companies (LMNP)
The 2025 budget promises to be a pivotal period for non-professional furnished rental companies (LMNP). The first proposals concerning this category of investors highlight tax reforms which could have significant impacts. This article reviews these changes, in particular the reintegration of depreciation into the calculation of capital gains and the raising of the revenue threshold, while addressing the issues and consequences for future investors.
The main lines of the finance bill
The finance bill for 2025 proposes several measures aimed at reforming the taxation applicable to LMNPs. The main objective is to modernize the tax system while maintaining an attractive framework for investors. Among the most anticipated measures, we note increasing the revenue threshold allowing you to benefit from LMNP status, which would increase from €23,000 to €30,000. This change aims to reduce the risk of revenue being sucked in through taxation, which results in a form of protection for small investors.
Reinstatement of depreciation
One of the key proposals is undoubtedly the reinstatement of depreciation in the calculation of taxable capital gains. Currently, furnished rentals can deduct this depreciation from their rental income, but in the event of the sale of the property, the situation could become more complex with the calculation of capital gains. From 2025, this deduction would be integrated into the purchase price of the property for the determination of capital gains. This means that investors will need to pay attention to the valuation of their property upon resale, as this measure could potentially reduce the net profit made upon sale.
Impact on investment profitability
The reinstatement of depreciation could have varied effects on the profitability of real estate investments. For some rental companies, this could mean a reduction in profit margins, because the calculation of the capital gain will now take into account these previously deducted depreciation. For others, particularly those who plan to keep their assets for the long term, this measure could be less impactful. However, it will be essential to evaluate the new profitability prospects after these changes.
A rebalancing in the face of long-term rental
The proposed changes also aim to rebalance the benefits linked to LMNP status compared to long-term rental, which does not benefit from the same tax incentives. This context could encourage certain investors to review their investment strategy, taking into account the new tax rules that will come into force.
Renovation aid and its implications
The bill also includes measures relating to renovation aid to encourage rental companies to improve the quality of their properties. This aid is clearly intended to encourage investments aimed at making housing more ecological and comfortable. Indeed, the enhancement of properties through renovation work could offset part of the potential losses due to the new tax rules. Investors will then need to be well informed about the mechanisms available to optimize their investment strategy.
Implications for the real estate market
These new regulations do not only concern individual rental companies. They could also have an impact on the entire real estate market. The combination of the increase in income thresholds and the new rules on depreciation could change investor behavior. We can expect a change in buying and selling behavior in the real estate market, as investors will have to adapt their strategy based on the new tax rules and the expected profitability of their investments.
Towards an uncertain future for LMNP status?
With these adjustments, the question of the future of LMNP status arises. Will rental companies still want to invest under this status with more complex taxation? The proposed changes could create a certain reluctance to invest, especially for newbies. However, a tax framework that remains attractive for those who get started could counterbalance these doubts. Investors will need to be vigilant and inform themselves regularly to best navigate this new tax environment.
The 2025 budget promises many changes for non-professional furnished rental companies. Tax reforms, although ambitious, will undoubtedly pose new challenges, but also opportunities for those who know how to adapt to changes in the real estate market. Vigilance will be required to optimize each investment in this rapidly changing framework.
