LMNP depreciation: a worked example

LMNP depreciation spreads the cost of a furnished home and its furniture over their useful life, so that a share can be deducted from receipts each year under the réel regime. Land is not depreciated, the building is depreciated by components over several decades and the furniture over a few years. Depreciation can never create a loss: what cannot be deducted in a year is carried forward, with no time limit (article 39 C of the French tax code, CGI).

The rules below are those in force on 9 November 2026, applying to 2026 income, declared in 2027. Under micro-BIC there is no depreciation: the flat allowance stands in for it.

This guide is part of our LMNP réel: the complete guide.

What is depreciated#

The price of the home, excluding land. Acquisition costs (notary fees, transfer duties, agency fees) can either be added to the depreciable price or deducted as an expense in the first year.

Works that improve, extend or replace a component, depreciated over their own life. Small repairs and upkeep are expenses of the year.

Furniture and equipment: bedding, appliances, crockery, furniture. Small low-value items can, under conditions, be expensed directly; the initial full furnishing of a home is depreciated.

What is not depreciated: land, and anything that does not lose value with use.

Step 1: take out the land#

The price of a home includes a share of land, flats included (the share of the building's plot). It is often between 10 and 30% depending on location: more in city centres, less in rural areas. Keep a record of the method used (split in the deed, a professional valuation, local values).

For a studio bought for €180,000 including costs, with 15% land:

• land, not depreciable: €27,000;
• depreciable building: €153,000.

Step 2: break the building into components#

The tax office expects a breakdown by components: each part of the building is depreciated over its own useful life. The split below is indicative; it depends on the property and must be justifiable.

Component	Share of building	Amount	Life	Yearly depreciation
Structure	50%	€76,500	50 years	€1,530
Roof, façade, waterproofing	15%	€22,950	25 years	€918
Fittings (electrics, plumbing, heating)	20%	€30,600	20 years	€1,530
Interior fit-out	15%	€22,950	10 years	€2,295
Total	100%	€153,000		€6,273

Our calculator simplifies this: it depreciates the whole building straight line over 30 years, so €5,100 a year for this studio. It gives an order of magnitude; the component breakdown is the one to keep in your accounts.

Step 3: add the furniture#

€7,000 of furniture and equipment, depreciated over 7 years: €1,000 a year.

For the studio, total yearly depreciation is therefore €7,273 with the components above (€6,273 + €1,000), or €6,100 with the calculator's simplified method (€5,100 + €1,000).

Step 4: the first year, pro rata#

Depreciation starts when the home is first let, pro rata. A studio let from 1 July is depreciated over six months only in the first year: with the simplified method, €3,050 instead of €6,100.

Step 5: the article 39 C ceiling#

Depreciation cannot create or increase a loss. It is deducted after expenses, and only until the result reaches zero (article 39 C, II of the CGI). The excess is deferred depreciation, carried forward with no time limit to later years (article 39 C, II, 3 of the CGI, BOI-BIC-CHAMP-40-20, the tax administration's official guidance).

With the simplified method, the studio brings in €9,600 a year.

Year 1, with €4,000 of expenses (interest, property tax, service charges, insurance):

Item	Amount
Receipts	€9,600
Expenses	− €4,000
Result before depreciation	€5,600
Depreciation of the year	€6,100
Depreciation deducted	− €5,600
Taxable result	€0
Deferred depreciation	€500

Year 2, with €3,200 of expenses: the result before depreciation is €6,400. Available depreciation is €6,600 (€6,100 for the year and €500 carried forward). €6,400 is deducted, the taxable result is zero, and €200 is carried forward.

As long as available depreciation exceeds the result before depreciation, your rent is not taxed. To run this with your own figures, use our free LMNP micro-BIC or réel calculator.

And when you sell#

Since 15 February 2025, depreciation deducted under réel reduces the purchase price used to compute the capital gain, so it increases the tax on the gain when you sell (article 150 VB of the CGI). Only depreciation actually deducted is clawed back, not depreciation still deferred. See our guide LMNP capital gains and depreciation clawback.

Sources#

• Article 39 C of the French tax code (depreciation of let assets), Légifrance
• BOI-BIC-CHAMP-40-20: furnished letting, tax regime, BOFiP
• Article 156 of the French tax code (deficits), Légifrance
• Article 150 VB of the French tax code (purchase price), Légifrance

Last checked on 9 November 2026