Micro-foncier or actual expenses: French rental tax
€15,000 threshold, 30% allowance, deductible expenses, rental deficit, three-year option: how to choose between micro-foncier and the réel regime, with a worked example.
Kivlo · Updated November 10, 2026 · Sources checked November 10, 2026 · 6 min read
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If your unfurnished rental income in France is €15,000 a year or less, you are under the micro-foncier regime by default: the tax office deducts a flat 30% from your rent to cover expenses and taxes you on the rest. You can instead choose the régime réel (actual-expenses regime): you then deduct what you really spent, but the choice binds you for three years. The réel pays off when your deductible expenses exceed 30% of your rent, or when you carry out major works.
This guide covers unfurnished lettings (location nue), whose rent is taxed as revenus fonciers (property income). Furnished lettings (LMNP) fall under a different set of rules, for business income.
The rules below are those in force on 10 November 2026. The amounts are those of the return filed in 2026 for 2025 income. If you are not tax resident in France, the rules specific to non-residents (tax rates, tax treaties) are outside the scope of this guide.
Who falls under micro-foncier
Micro-foncier applies automatically when both conditions are met (article 32 of the French tax code, CGI):
- the gross rent of your tax household (foyer fiscal), across every property let unfurnished and excluding recoverable service charges, does not exceed €15,000 for the year;
- none of your properties is under a special regime.
The threshold is not prorated: a property let for six months counts for what it actually earned, with no annualisation (BOI-RFPI-DECLA-10, the tax administration's official guidance).
In a year when your rent exceeds €15,000, you are moved to the réel regime automatically for that year. You return to micro-foncier by default when it falls back below the threshold.
Exclusions
Whatever your rent, you cannot use micro-foncier if you or a member of your tax household own (article 32, 2 CGI, BOI-RFPI-DECLA-10, § 60 and 70, notes to form 2044):
- a listed historic monument, or a property held in bare ownership (nue-propriété);
- a dwelling under a depreciation scheme: Périssol, Besson neuf, Robien or Borloo neuf;
- a dwelling that carries a specific deduction: Robien ZRR, Scellier ZRR (article 31, I, 1°, k CGI), or an Anah agreement under Borloo ancien or Cosse;
- a dwelling for which you claim the Loc'Avantages tax reduction (below-market rent);
- a dwelling for which you claim a tax reduction for rental investment in tourism (articles 199 decies EA and 199 decies F CGI);
- only shares in SCPI funds or property companies, with no unfurnished property let directly, or shares in companies that let one of the properties above or use the Robien SCPI or Borloo SCPI depreciation.
The exclusion only applies for the years in which you claim the tax advantage concerned (BOI-RFPI-DECLA-10, § 80).
The Besson ancien deduction no longer rules out micro-foncier since 2023 income: the 2024 Finance Act removed it from article 32 (version applicable to 2025 income), even though the BOFiP still lists it.
From 2026 income, a new depreciation deduction also rules out micro-foncier: the one for homes let unfurnished in a block of flats and bought between 21 February 2026 and 31 December 2028, new or older with works (article 31, I, 1°, i and j CGI). If you or a member of your household claim it for a home, or hold shares in a company that lets such a home, the whole household moves to the réel regime for the years concerned (article 32, 2, c and e CGI). Letter j of article 31, which used to be Besson ancien, now refers to this new scheme. This guide covers 2025 income, which the exclusion does not reach yet; the scheme is described in our guide on form 2044.
Pinel does not rule out micro-foncier
The Pinel tax reduction does not, on its own, prevent you from using micro-foncier (BOI-RFPI-DECLA-10). The scheme's own commitments are covered in our guide Pinel: keeping your commitments.
How micro-foncier works
You report your gross rent in box 4BE of the main income tax return, form 2042. You do not file a form 2044. A flat 30% allowance (abattement, an automatic reduction meant to cover all your expenses) is applied: you are taxed on 70% of your rent.
In return, no actual expense is deductible: not works, not loan interest, not property tax (impots.gouv.fr).
How the réel regime works
Under the réel regime, your net property income is the rent received in the year minus the expenses paid in the year. You itemise them on form 2044, attached to your income tax return. The main deductible expenses, with their line on the 2044:
| Line | Expense | Detail |
|---|---|---|
| 221 | Administration and management costs | Letting agent, caretaker, legal fees, actual amount |
| 222 | Other management costs | Flat €20 per let unit |
| 223 | Insurance premiums | Non-occupying owner cover, unpaid-rent insurance |
| 224 | Repairs, maintenance and improvement works | Not construction, reconstruction or extension works |
| 227 | Property tax (taxe foncière) | Excluding the household waste tax, which is recoverable from the tenant |
| 229 | Building service-charge advances (copropriété) | Adjusted the following year, line 230 |
| 250 | Loan interest | Loan to buy, keep, repair or improve the property |
Source: notes to form 2044 for 2025 income.
The rental deficit
When your expenses exceed your rent, you have a déficit foncier (rental deficit). It is handled in three steps (BOI-RFPI-BASE-30-20):
- Rent first absorbs loan interest. The part of the deficit that comes from interest can only be set against rental income.
- The part that comes from other expenses is deducted from your total income (salary, pensions…) up to €10,700 a year, raised to €15,300 for a Périssol or Cosse property (article 156 CGI).
- The excess, and the interest part, are carried forward against your rental income for the next ten years.
If your total income is too low to absorb the deductible part, the balance becomes a general deficit, carried forward against total income for the next six years.
Keep letting for three more years
The property must stay let until 31 December of the third year after the deduction. A deficit deducted from 2025 income therefore requires letting until 31 December 2028. Otherwise, total income for the three previous years is recomputed without the deduction. Selling the property within that period, or switching to a furnished letting, counts as ending the letting. The deduction stands, under conditions, if the letting ends because of the invalidity (2nd or 3rd category), dismissal or death of the taxpayer or their spouse or civil partner, if a property that was let is compulsorily purchased (expropriation), or if the SCPI that holds it merges (BOI-RFPI-BASE-30-20, § 370 to 440).
The €10,700 limit is raised by the amount of energy-renovation expenses, up to €21,400 a year, for works that take a dwelling from energy class E, F or G to A, B, C or D, with a quote accepted from 5 November 2022 and works paid between 1 January 2023 and 31 December 2027 (service-public.gouv.fr). The works must be carried out by professionals (BOI-RFPI-BASE-30-20, § 250), and an energy performance certificate (DPE) before and after the works must show the change of class. On the 2044, these expenses go on line 224 bis, not line 224, to benefit from the raised limit (notes to form 2044).
How long the réel option binds you
If you qualify for micro-foncier, you opt for the réel regime simply by filing a 2044 within the income tax return deadline. The option is irrevocable for three years and covers all of the household's rental income: you cannot put one property under the réel and another under micro-foncier.
After three years, the option renews every year for as long as you file a 2044. You may then return to micro-foncier (BOI-RFPI-DECLA-10).
Worked example
A flat let unfurnished at €1,000 a month excluding service charges: €12,000 of rent in 2025. Expenses paid during the year:
| Expense | Amount |
|---|---|
| Property tax, excluding household waste tax | €1,100 |
| Non-occupying owner insurance | €180 |
| Non-recoverable building service charges | €650 |
| Flat management costs | €20 |
| Loan interest | €2,300 |
| Total | €4,250 |
| Micro-foncier | Réel | |
|---|---|---|
| Rent | €12,000 | €12,000 |
| Deduction | 30% = €3,600 | Actual expenses = €4,250 |
| Taxable property income | €8,400 | €7,750 |
The réel regime lowers taxable income by €650: expenses are 35% of the rent, more than the flat 30%.
Without a loan, expenses fall to €1,950. The réel regime would then give €10,050 of taxable income against €8,400 under micro-foncier: micro-foncier wins.
Same flat, with €14,000 of maintenance works in 2025: rent first absorbs the €2,300 of interest, leaving €9,700. The other expenses (€15,950) exceed that by €6,250: that is the deficit, deductible from total income since it stays under €10,700. Taxable property income is nil. With €20,000 of works, the deficit would be €12,250: €10,700 deducted from total income, €1,550 carried forward against future rental income.
These figures are taxable income. The actual saving depends on your tax rate and on social charges. To compare with your own figures, use our free micro-foncier or actual expenses simulator.
Which one to choose
Micro-foncier suits you if you have little or no loan left, few expenses and no planned works: you report one figure, with no 2044.
The réel regime suits you if your deductible expenses exceed 30% of your rent (simple arithmetic: above that, the flat allowance works against you), if you repay a loan with significant interest, or if you plan works that will create a deficit.
Before opting, look three years ahead: one year of heavy works may justify the réel regime, but you will stay in it for the next two years, even if your expenses fall.
Have your own case checked
The right regime depends on your rent, your expenses, your works and your other income. Before opting for the réel regime or starting works that will create a deficit, have your situation checked by a French chartered accountant or tax adviser.
Sources
- Rental income from an unfurnished letting, service-public.gouv.fr (in French)
- Notes to form 2044 (2025 income), impots.gouv.fr (in French)
- Article 32 of the French tax code (micro-foncier), Légifrance
- Article 31 of the French tax code (specific deductions), Légifrance
- Article 156 of the French tax code (rental deficit), Légifrance
- BOI-RFPI-DECLA-10: micro-foncier regime, BOFiP
- BOI-RFPI-BASE-30-20: offsetting rental deficits, BOFiP
Last checked on 10 November 2026
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Frequently asked questions
What is the micro-foncier ceiling?
€15,000 of gross rent a year, excluding service charges, for the whole tax household and every property it lets unfurnished. Above that, the réel regime applies automatically.
Can I use the réel regime for one property and micro-foncier for another?
No. Opting for the réel regime covers all of the tax household's rental income from unfurnished lettings.
How long does the option for the réel regime bind me?
Three years, irrevocably, when you could otherwise have stayed under micro-foncier. After that it renews every year for as long as you file a form 2044.
How much of a rental deficit can I deduct from my other income?
Up to €10,700 a year (€15,300 for a Périssol or Cosse property), for the part of the deficit that does not come from loan interest. The rest is carried forward against rental income for the next ten years.
Does this guide apply to furnished lettings?
No. Rent from a furnished letting is taxed as business income (LMNP), under its own regimes.
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Updated November 10, 2026 · Sources checked November 10, 2026 · 6 min read