The LMNP depreciation under the real regime allows for the deduction each year of a fraction of the property’s value and its equipment from rental income. The calculation of LMNP depreciation is based on a precise mechanism, the component breakdown, whose parameters directly determine the amount of tax saved. Since the finance law for 2025, the situation has changed on a major point: the reintegration of depreciations into the capital gain upon resale.
Measuring the real impact of this mechanism requires comparing the durations, shares, and tax consequences at exit.
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Reintegration of depreciations into the LMNP capital gain: what the 2025 finance law changes
Historically, the LMNP status under the real regime offered a double advantage. Depreciations reduced the taxable profit each year, without ever being included in the calculation of the real estate capital gain upon resale. This logic clearly distinguished LMNP from ownership in a corporation subject to corporate tax, where the capital gain is calculated on the net accounting value (purchase price minus accumulated depreciations).
Since the finance law for 2025, depreciations applied in real BIC are reintegrated into the taxable capital gain for sales made from 2025 onwards. Previous depreciations are also affected. The LMNP thus shifts from a tax niche status with almost no exit to a simple deferral of taxation.
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For an investor preparing their LMNP depreciation calculation, this reform alters the strategy. An aggressive depreciation over short durations generates immediate savings but mechanically increases the taxable capital gain upon resale. The projection over the holding period becomes a full-fledged calculation parameter, not just a simple tax bonus.
Component breakdown: compared durations and shares
The calculation of real estate depreciation in LMNP does not apply to the property as a whole. The land, which is not depreciable, is first isolated. The rest is broken down into components, each depreciated over its own duration reflecting its actual wear.
| Component | Indicative share | Current depreciation duration |
|---|---|---|
| Structural work (structure, walls) | The largest | Several decades |
| Roof | Moderate share | About twenty years |
| Electrical and plumbing installations | Moderate share | About fifteen years |
| Interior fittings (kitchen, floors) | Variable share | About ten years |
| Furniture and equipment | Distinct from the real estate | Five to ten years depending on the type |
The gap between components is significant. Interior fittings and furniture, depreciated over shorter durations, generate higher annuities in the first years. In contrast, structural work, depreciated slowly, produces a low but lasting deduction.
Land share: an underestimated parameter
The land does not depreciate and can never be subject to depreciation. Its share, often estimated between one-fifth and one-third of the acquisition price depending on the location, reduces the depreciable base accordingly. A property located in the city center of a metropolis will have a higher land share than a property in a rural area, which decreases the total deductible amount.
Pro rata temporis and unlimited carryover of unused depreciations
When a property is acquired during the year, the depreciation for the first year is calculated pro rata based on the number of days between the rental start date and the end of the accounting period. A property put into service in September generates only about one-third of the full annuity in the first year.
The other mechanism to integrate is the capping. Depreciation cannot create a tax deficit in LMNP. If the amount of depreciations exceeds the result after deducting expenses, the excess is not lost. It is carried over indefinitely to subsequent periods until fully absorbed.
- The pro rata temporis reduces the first annuity but does not erase any deduction: the balance carries over.
- The unlimited carryover of unused depreciations protects investors whose expenses temporarily exceed rents (major renovations, rental vacancy).
- The capping only concerns the depreciation of the property and furniture, not current expenses (loan interest, insurance, property tax) which can create a reportable BIC deficit on future rental income.
LMNP depreciation and furnished tourist rentals: specific rules to watch
Recent reforms also target furnished tourist rentals. The flat-rate allowances of the micro-BIC regime have been modified for seasonal rentals, making the real regime and its depreciation mechanism even more crucial for this category of properties.
A property owner renting short-term through platforms must check if the micro-BIC regime remains advantageous after the adjustment of allowances, or if switching to the real regime with component depreciation yields a more favorable tax result. The comparison depends on the level of actual expenses and the depreciable value of the property.
Maintaining accounting in accordance with the general accounting plan
Depreciation in LMNP under the real regime requires commitment accounting in accordance with the general accounting plan. Each component must be individualized in the fixed assets, with its base, duration, and method of depreciation (linear in almost all cases). This obligation justifies, for the majority of investors, the use of an accountant or specialized software capable of generating a compliant FEC file.
The reintegration of depreciations into the capital gain upon resale transforms the LMNP depreciation calculation into an exercise of wealth projection. Each euro depreciated reduces tax today but increases the tax bill at exit. Calibrating depreciation durations, the land share, and the deduction rate based on a realistic holding horizon now constitutes the main adjustment variable of the real regime.