What is the LMNP status?
LMNP is a tax regime applicable to individuals who let one or more furnished dwellings, provided rental income does not exceed €23,000 per year OR remains lower than the household's other income. Beyond these thresholds, the regime automatically switches to LMP (Loueur en Meublé Professionnel — Professional Furnished Lessor), with different rules.
Income from furnished letting is declared as BIC (Industrial and Commercial Profits), not as foncier (real-property) income as for unfurnished lettings. This category opens up two tax regimes: the micro-BIC (simplified flat-rate regime), and the actual-expense regime, more complex but significantly more advantageous in most cases.
In Nice, LMNP applies equally to long-term furnished rentals (students, young professionals, retirees) and to short-term furnished rentals (Airbnb, tourist lets). It is the standard legal framework for a furnished rental property.
LMNP is not reserved for seasoned investors. Any owner who lets a furnished property is LMNP, whether they chose it or not. The real question is: under which tax regime do you optimise?
The micro-BIC regime: simple but limited
The micro-BIC regime works on a flat-rate principle: you declare your gross turnover and the tax authorities apply a standard tax allowance, deemed to cover your expenses. It is the regime applied by default when you start out and your income remains below the thresholds.
For unclassified furnished rentals (standard Airbnb case)
Since 1 January 2025, the micro-BIC tax allowance for unclassified furnished rentals has been drastically reduced: it has fallen from 50% to 30%, with the turnover ceiling lowered from €77,700 to €15,000. In practice, as soon as your Airbnb in Nice exceeds €15,000 in annual income, you automatically switch to the actual-expense regime.
This reform makes micro-BIC of little relevance for almost any property in Nice: a standard one-bedroom flat in a good neighbourhood quickly exceeds €30,000 in annual income, well above the ceiling.
For star-rated furnished tourist rentals
Star-rated furnished tourist rentals (classified via the prefectural procedure or an accredited body) retain a markedly more favourable regime: a 50% tax allowance and a €77,700 ceiling. This is one of the main reasons we systematically recommend that our owner clients undertake an official rating procedure.
The cost of a rating (€300 to €600 depending on the body) pays for itself within a few months through the tax saving, while also offering a commercial advantage on Airbnb (the rating is highlighted in the listing).
The actual-expense regime: real tax optimisation
The actual-expense regime is more complex to declare (generally requires a specialist chartered accountant) but offers tax advantages on a different scale. In practice, you deduct all actual expenses and you depreciate the property and the furniture.
Deductible expenses
All actually incurred expenses are deductible: loan interest, property tax, building service charges (including works), CFE (Business Property Tax — Cotisation Foncière des Entreprises), non-occupying owner's insurance, management fees (concierge commission), cleanings, linen, consumables, electricity, water, internet, accounting fees, minor repairs, and even certain mileage costs linked to the activity.
Depreciation: the most powerful lever
Depreciation consists of deducting each year a fraction of the value of the property and the furniture, as if they were accountably depreciating. In practice, a flat acquired for €400,000 will be depreciated over 25 to 30 years, i.e. approximately €13,000 to €16,000 per year of purely accounting expense (which does not actually leave your pocket).
Furniture follows the same principle over shorter periods (5 to 10 years). New furnishings worth €15,000 generate €1,500 to €3,000 of annual depreciation.
Concrete result: most LMNP owners under the actual-expense regime in Nice have a nil or negative taxable result for the first 8 to 15 years, meaning zero tax on rental income. And if the result is in deficit, the loss can be carried forward for 10 years (but only against future LMNP income, not against overall income).
On the Nice market, the actual-expense LMNP regime is almost systematically more advantageous than micro-BIC, as soon as you have more than €12,000-15,000 of annual rental income. The investment in a chartered accountant (between €500 and €1,200 per year) is more than recouped through the tax saving.
The 2025 reform: capital gain on resale
The major structural change to LMNP that came in 2025 concerns the capital gain on resale. Previously, depreciation taken under the actual-expense regime was not factored into the calculation of the capital gain on sale — this was one of the regime's most spectacular advantages.
Since 1 January 2025, depreciation is now reintegrated into the capital-gain calculation. In practice, if you have depreciated €80,000 over 10 years, those €80,000 are added to your taxable capital gain when you sell.
This reform mechanically reduces the net advantage of the actual-expense regime for owners planning a medium-term resale (5 to 10 years). For owners with a long-term outlook (15 to 30 years), the depreciation advantage during the operating phase remains far greater than the tax burden on resale, especially as capital gains benefit from a progressive tax allowance based on holding period (full exemption from income tax after 22 years, full exemption from social levies after 30 years).
Notable exception: student residences, senior residences and disability-adapted residences retain the old regime (no reintegration of depreciation). This is one of the arguments in favour of investing in managed-service residences.
Formalities for starting LMNP in Nice
Launching an LMNP activity in Nice requires a few formalities, to be carried out in the following order:
- Register your activity with the INPI (the French intellectual property institute, which now handles business registrations — formerly via the Commercial Court Registry) through the single-window portal. Deadline: 15 days maximum after the effective start of letting.
- Obtain a SIRET number in your name (individual LMNP) or in your company's name (LMNP via SCI under Corporate Income Tax (IS), for example).
- If the property is a furnished tourist rental: declare it at Nice town hall and obtain the mandatory registration number to display on Airbnb. Free, online procedure.
- Choose your tax regime (micro-BIC or actual-expense) on the P0i declaration. The actual-expense option must be notified before 1 February of the year concerned.
- Take out non-occupying owner's insurance suitable for furnished letting.
- If applicable (secondary residence let as a furnished tourist rental): initiate the change-of-use procedure at town hall. In Nice, watch out for the per-neighbourhood quota regime introduced in 2026 (application procedure temporarily suspended — see our up-to-date regulations article).
What yield should you expect in Nice?
In Nice, the combination of furnished letting and LMNP status offers significantly higher yields than classic unfurnished letting. Here are the ranges observed in 2026 depending on strategy.
Furnished long-term rental
Average gross yield between 4 and 6% depending on the neighbourhood. The best gross yields in Nice are found in areas such as Libération, Riquier, Saint-Roch and Magnan, where acquisition prices remain accessible and demand from students and young professionals is sustained. Conversely, Vieux-Nice, the Promenade and the Carré d'Or show more modest gross yields (3-4%) but superior capital appreciation.
Furnished short-term rental (Airbnb)
Average gross yield between 6 and 9%, sometimes more on premium properties. In the best neighbourhoods (Vieux-Nice, Promenade des Anglais, Carré d'Or), gross yield can reach 8 to 10% with professional management. See our full analysis of Airbnb income in Nice for the detailed figures.
After accounting for the Airbnb commission (15.5% under host-only), the concierge commission (around 20%) and running costs, net yield generally sits between 4 and 6%. Actual-expense LMNP often neutralises income tax during the first few years, further improving the net result in your pocket.
Individual LMNP or via a company (SCI under IS)?
A common question: should you invest as an individual LMNP or through a company (typically an SCI (Société Civile Immobilière — French real estate holding company) under Corporate Income Tax (IS))? The answer depends on your wealth situation and your time horizon.
Individual LMNP is administratively simpler, ideal for 1 to 3 properties, and allows relatively straightforward transmission (gift, succession). It is the default choice for the vast majority of private investors in Nice.
An SCI under IS makes sense for larger portfolios (4+ properties) or structured family projects (early transmission to children, optimised undivided ownership). It also enables recovery of VAT on certain new-build investments. In return, it is more complex to manage, subject to IS, and resale generates double taxation (IS on the company's capital gain, then Income Tax on the gain from the sale of the shares).
For most LMNP investors in Nice with 1 to 3 properties, individual LMNP under the actual-expense regime remains the most rational choice.
The mistake to avoid: underestimating LMNP taxation
The most common mistake we see among new Airbnb owners in Nice is staying on micro-BIC by default, without having compared it with the actual-expense regime. The result: they pay several thousand euros of unnecessary tax every year.
Switching to the actual-expense regime requires a procedure (notification to the SIE before 1 February, declaration via the 2031 tax bundle), but the gap is typically €2,000 to €8,000 of annual saving for a standard property in Nice. The cost of an LMNP-specialised chartered accountant (€500 to €1,200 per year) is negligible compared with the net gain.
If you entrust us with the management of your Nice Airbnb via our concierge service, we systematically put you in touch with specialist chartered accountants whom we validate for the quality of their advice.
Social levies and CFE
Beyond income tax, LMNP income is subject to social levies at 17.2% (rate maintained in 2026, despite the CSG (Generalised Social Contribution) increase voted the same year — which does not apply to property BIC).
The CFE (Business Property Tax) is owed from the first year of activity. Its amount depends on turnover and the property's rental value. In Nice, the LMNP CFE in practice ranges from €200 to €1,500 per year depending on the property.
Note: an exemption is possible in the first year of activity, provided you file the initial declaration (form 1447-C-SD) with the Service des Impôts des Entreprises (SIE — Business Tax Office) covering your property.