LMNP Declaration: tips for reducing your taxes

LMNP declaration is an essential process for any investor in furnished rentals, in particular to optimize the taxation of furnished rental income . As a professional furnished rental company , you have the opportunity to benefit from advantageous tax regimes, but it is important to understand the procedures. The LMNP declaration allows you to reduce your taxes, depending on the tax regime you choose: the micro-BIC or the simplified real regime . Each option has different advantages, depending on your industrial commercial profits and the nature of your investment. In this article, we will guide you through the steps of the LMNP declaration, explain the two tax regimes, and give you all the details related to the costs of this declaration.

How to optimize your LMNP declaration with ease?

The LMNP declaration is an essential step for investors in furnished rentals who wish to benefit from the tax advantages of the Non-Professional Furnished Rental (LMNP) status . By correctly completing this declaration, you will be able to optimize your taxation and reduce your taxes on rental income . This process is relatively simple if you meet the necessary conditions and choose the tax regime that best suits your situation. In this section, we explain how to make an LMNP declaration step by step, with an emphasis on the online procedures, the conditions to be met and the tax choices available.

What are the conditions to become LMNP?

Before completing your LMNP declaration, it is essential to meet the conditions required to benefit from the status of professional furnished lessor. Indeed, to be considered a professional furnished lessor (LMP), you must meet certain conditions, such as receiving more than €23,000 in rental income per year or that this income represents more than 50% of your total income. If you do not meet these criteria, you will automatically be classified under the status of non-professional furnished lessor (LMNP), which still allows you to benefit from numerous tax advantages.

It is important to emphasize that the LMNP status is particularly advantageous for investors who opt for the micro BIC regime or the simplified real regime. Indeed, these two tax regimes allow you to deduct expenses and benefit from a reduction or deduction of depreciation. The choice of tax regime will depend on the amount of your industrial and commercial profits and your expenses.

How to declare your LMNP online?

The LMNP declaration is mainly made online, on the tax website. If you are a professional furnished rental company, you must declare your income on form 2042 C PRO. This form is intended for people with a furnished rental activity, whether they are in the micro BIC regime or the simplified real regime.

Declaration under the micro-BIC regime

If you choose the micro-BIC regime , you will benefit from a flat-rate deduction of 50% on your furnished rental income , which means that you will only be taxed on half of your income. This regime is simplified and does not require you to justify your expenses, which is an advantage if your expenses are low. Your LMNP income will be declared directly in the corresponding section of the 2042 C PRO form. The micro BIC regime is particularly suitable for investors with relatively modest furnished rental income or for small furnished rental areas.

Declaration under the simplified actual regime

The simplified real regime allows you to deduct a large number of real expenses, such as maintenance costs, loan interest, or even depreciation of real estate and furniture. This regime is advantageous if your industrial and commercial profits are high and if you have significant expenses. In this case, you will have to complete form 2031, in addition to form 2042 C PRO, in order to detail your expenses and depreciation. The simplified real regime thus allows you to optimize the deduction of your expenses and significantly reduce your tax.

Choosing the right form and option

The first step is therefore to register online on the tax website and fill out the appropriate form. Depending on whether you choose the micro BIC regime or the BIC real regime , you will have to choose the option that suits you best. In the case of the simplified real regime , you will have to detail your income, expenses and depreciation on form 2031, then report this information on form 2042 C PRO.

Tips for a successful declaration

Under the simplified real regime, you can deduct a large number of expenses related to your furnished rental activity. It is essential to be fully aware of all the expenses that can be taken into account to reduce your taxable base. Among the deductible expenses, we find:

• Loan interest related to the purchase of the property.
• Management and maintenance costs (repairs, improvements).
• Insurance costs (non-occupant owner insurance, unpaid rent guarantee).
• Depreciation of real estate housing and equipment.

These charges will reduce your industrial and commercial profits, which will allow you to pay less tax. Remember that the depreciation of a property can be spread over several years, thus gradually reducing your taxable income. This option is particularly advantageous for investors with a simplified real regime.

Remember to respect the declaration deadline, and to complete the form with the necessary numbers to avoid any errors. By following these steps, you will maximize your tax deductions related to furnished rentals.

Respect the deadlines

Compliance with the LMNP income declaration deadlines is essential. In general, the online declaration must be made before the end of May of the year following the year of furnished rentals . In the event of a delay, penalties may be applied. It is therefore important to prepare your declaration well in advance, checking that you have all the necessary information on your furnished rental income and the expenses to be deducted.

Filing an LMNP declaration online is a relatively simple process if you meet the conditions to benefit from the status and choose the tax regime that is best suited to your situation. The micro BIC regime is ideal for those who want a simplified declaration, while the simplified real regime allows you to deduct many expenses and depreciate the property. Whatever option you choose, the important thing is to declare your LMNP income correctly, respect the declaration deadline and take advantage of the tax benefits to reduce your taxes.

How much does the LMNP declaration cost?

The LMNP declaration is an essential step for any investor in professional or non-professional furnished rentals . It allows you to declare furnished rental income, and thus optimize the tax linked to this activity. However, one question frequently comes up: how much does the LMNP declaration actually cost?

The cost of this declaration depends on several factors, such as the tax regime chosen, the help of a professional (accountant, for example), and possible errors that could result in penalties. It is also important to respect the declaration deadline to avoid additional costs, including penalties, and to correctly indicate the necessary numbers in the forms to ensure the accuracy of the declaration.

Cost of the LMNP declaration depending on the tax regime

The cost of the LMNP declaration varies depending on the tax regime you choose. There are mainly two tax regimes for furnished rentals: the micro-BIC regime and the simplified real regime. Each of these regimes has its own particularities, and this directly influences the cost of the declaration.

The micro-BIC regime

The micro-BIC regime is the simplest and most economical option for investors with relatively low rental income . This regime applies automatically when annual rental income does not exceed €72,600 for non-professional furnished rental or €176,200 for professional furnished rental.

Under the micro-BIC, the procedures are simplified. The investor must complete a 2042 C PRO form, in which he reports his rental income. This form is available free of charge on the tax website and allows you to declare LMNP income without having to justify the expenses. If you opt for this declaration, there are generally no associated fees. The LMNP declaration under the micro-BIC is free if it is carried out by you. You simply have to declare LMNP income online, without needing an accountant or specific software. This regime is therefore particularly suitable for small investors with low expenses and relatively modest furnished rental income. One of the major advantages of the micro-BIC regime is the flat-rate deduction of 50% on rental income, which automatically reduces the amount of taxable industrial commercial profits.

The simplified real regime

The simplified real regime is a more complex and more advantageous choice for investors with significant expenses (works, loan interest, depreciation). It allows you to deduct real expenses (management fees, maintenance, depreciation, etc.), which can considerably reduce the tax to be paid.

Filing under the simplified real regime is more complex, as it involves justifying expenses and depreciating real estate and furniture. You will need to complete form 2031 in addition to form 2042 C PRO. The fees associated with filing under the simplified real regime can be high, as it is often necessary to hire an accountant to help fill out the forms correctly and optimize depreciation. An accountant's fees for filing under the simplified real regime can vary from €150 to €600, depending on the complexity of the situation and the expenses to be deducted.

Although more expensive, the simplified actual system allows a large number of expenses and depreciation to be deducted, which can considerably reduce furnished rental income subject to tax and optimize the taxation of industrial and commercial profits.

Cost of an accountant for the LMNP declaration

If you are under the simplified real regime , it is strongly recommended that you call upon an accountant to help you optimize your LMNP declaration . Indeed, this regime involves numerous accounting procedures, such as the management of depreciation and expenses, which can be complex for an individual not used to accounting management.

Why use an accountant?

There are several ways an accountant can help you:

• The accountant can maximize tax deductions by helping you properly manage depreciation of real estate and furniture, as well as other deductible expenses.
• Using a professional ensures that you comply with current tax rules, thus avoiding errors and penalties.
• The LMNP declaration under the simplified real regime requires a lot of time and knowledge, which the chartered accountant can manage for you.

Cost of accountant fees

Accountant fees vary depending on the complexity of the return and the services provided. Here is an estimate of costs:

• For an LMNP declaration under the micro-BIC regime , the intervention of an accountant is not necessary, but in certain cases, an accountant can be consulted to validate the declaration, with fees ranging from €100 to €150.
• For an LMNP declaration under the simplified actual regime , the cost may be higher, between €300 and €600 per year, or even more depending on the complexity of the charges and depreciation to be managed.

Cost of reporting errors and penalties

It is essential to be careful when filing the LMNP declaration , as errors or omissions can result in financial penalties.

Risks of reporting errors

In case of late declaration, fines may apply. If the declaration is incorrect, adjustments will be necessary, which can lead to additional costs. For example, an error in the depreciation of the property or in the deduction of expenses can change the amount of commercial industrial profits and lead to a regularization of your taxes, often with penalties.

Penalties

If you fail to meet the deadlines for filing your LMNP declaration, a penalty of 10% may be applied to the tax due. If the delay exceeds a certain number of months, an additional increase may be added. In the event of fraud or failure to declare rental income, the penalties are even more severe, up to 40% of the omitted industrial and commercial profits. These penalties can have a considerable impact on your income, particularly if your rents are high or if you own several furnished properties.

Cost of regularization

If you need to regularize an error in your LMNP declaration, you may have to pay late payment interest or penalties, depending on the seriousness of the error. Regularization fees can reach several hundred euros, especially if an accountant or tax specialist is needed to resolve the problem. The cost of an error can be high, especially if you are in the tourism sector, where the management of furnished rentals and rental income must be rigorous to avoid a tax deficit.

The cost of the LMNP declaration

The cost of the LMNP declaration depends largely on the tax regime chosen and the choices made in terms of support. If you opt for the micro-BIC regime, the declaration may be free if it is done by you, but it offers fewer possibilities for deduction. If you choose the simplified real regime, it may be wise to call on an accountant or a service specialized in furnished rentals, which may result in additional costs, but will allow you to maximize the tax benefits. Finally, it is important to complete your declaration correctly to avoid errors, which could result in penalties and additional costs.

Conclusion

The LMNP declaration is an important step for any investor in furnished rentals . The choice of tax regime plays a decisive role in optimizing your rental income . The micro-BIC regime is ideal for those who want simplified management, while the simplified real regime allows you to deduct more expenses and depreciate your assets, but requires professional support. It is important to understand the specificities of your furnished rental activity to choose the regime best suited to your situation and thus maximize your tax benefits. The deadline for declaring your rental income must be respected to avoid any penalties. Depending on your declaration number , it may be necessary to provide detailed information on your rentals so that the tax benefits are applied correctly. Take advantage of the opportunities offered by the LMNP today, taking care to select the tax regime that corresponds to your needs. A well-completed declaration can allow you to reduce your taxes and optimize the profitability of your rental investment.