You are buying a furnished apartment to rent out, and your accountant is talking to you about depreciation. The principle is simple: each year, you deduct a fraction of the property’s price from your rental income. As a result, your taxable base decreases, sometimes down to zero. However, you need to know how to break down the property, choose the right durations, and measure the real impact on your LMNP taxation.
Breakdown by components: the mechanics that the spreadsheet does not show
Depreciation in LMNP is not calculated on the total price of the property. The tax administration requires the property to be divided into several components, each with its own useful life. This breakdown determines the annual deductible amount.
Let’s take an apartment purchased for a total price of 200,000 euros, including notary fees. The first step is to remove the value of the land, as land never depreciates. Generally, the share of the land represents a variable proportion depending on the location, often estimated between 10 and 20% in a typical urban area.
Suppose here that the land represents 15%, or 30,000 euros. The depreciable base of the building is then set at 170,000 euros. This amount is then distributed among several components. A detailed example of LMNP depreciation calculation helps visualize this breakdown line by line.
Here is a common breakdown:
- The structural work (load-bearing walls, foundations): depreciated over a long duration, often around 40 to 50 years, and representing the largest share of the building.
- The roof, waterproofing, and exterior joinery: depreciated over an intermediate duration, typically between 20 and 25 years.
- Technical installations (plumbing, electricity, heating): depreciated over about 15 to 20 years.
- Interior fittings (equipped kitchen, floor coverings): depreciated over a shorter duration, around 10 to 15 years.
Each component produces a distinct annual depreciation. The sum of these annuities constitutes the total deductible expense for the year.
Concrete calculation: an LMNP apartment depreciated year by year
Let’s revisit our apartment at 200,000 euros. After removing the land (30,000 euros), the depreciable base of the building is 170,000 euros. Let’s add furniture purchased for 8,000 euros, depreciable over 5 to 7 years depending on the furniture.
To simplify, let’s assume the following breakdown of the building:
| Component | Share | Amount | Duration | Annual Depreciation |
|---|---|---|---|---|
| Structural work | 50% | 85,000 € | 40 years | 2,125 € |
| Roof and joinery | 15% | 25,500 € | 25 years | 1,020 € |
| Technical installations | 20% | 34,000 € | 20 years | 1,700 € |
| Interior fittings | 15% | 25,500 € | 12 years | 2,125 € |
| Furniture | – | 8,000 € | 6 years | 1,333 € |
The total depreciation in the first year reaches approximately 8,300 euros. If your annual rents are 9,600 euros (800 euros per month) and you also deduct expenses (property tax, insurance, loan interest, accounting fees), your taxable result can easily drop to zero.
Why does this detail matter so much? Because LMNP depreciation cannot create a deficit. The deduction is capped at the amount of rents minus expenses. The unused portion is not lost: it is carried forward to subsequent years, with no time limit.
What unlimited carryforward changes in practice
Imagine that your deductible expenses (excluding depreciation) amount to 4,500 euros per year. Your rents are 9,600 euros. The balance before depreciation is therefore 5,100 euros. You can only deduct 5,100 euros of depreciation from the 8,300 euros calculated.
The remaining 3,200 euros are stored in “deferred depreciations.” They will reduce your result in subsequent years when your current expenses decrease (for example, after the total repayment of the loan).
LMNP depreciation and capital gains upon resale: the tax trap of 2025
Until recently, the depreciation deducted in LMNP had no impact on the calculation of capital gains upon resale. The owner benefited from a deduction each year and then sold under the capital gains regime for individuals, without reintegration. This was one of the most powerful advantages of the status.
The reform planned for 2025 changes the game. Deducted depreciations will now reduce the acquisition price used for calculating capital gains. The mechanism is simple: if you have deducted 50,000 euros in depreciations over ten years, your taxable acquisition price decreases accordingly. The taxable capital gain mechanically increases.
Managed residences: an exception to know
Not all properties are treated the same. Service residences (student residences operated under a commercial lease, senior residences, facilities for the elderly or disabled) benefit from an exception: depreciations are not reintegrated into the capital gain upon disposal.
The same depreciation calculation therefore produces two very different tax results upon exit:
- A classic furnished apartment: depreciation reduces tax during ownership but increases the taxable capital gain upon resale.
- An eligible managed residence: depreciation reduces tax during ownership without a tax cost upon resale.
- In both cases, the annual depreciation calculation remains the same; only the patrimonial consequence differs.
Real LMNP regime: when depreciation becomes profitable
Depreciation is only accessible under the simplified real regime. The micro-BIC regime, on the other hand, grants a flat-rate allowance of 50% on rents but prohibits any deduction of expenses or depreciation.
Switching to the real regime becomes interesting as soon as the sum of your actual expenses and your depreciation exceeds half of your rents. In our example, the expenses (4,500 euros) plus the deductible depreciation (5,100 euros) total 9,600 euros, which is the entirety of the rents. The taxable result drops to zero.
Under micro-BIC, you would have declared 4,800 euros of taxable income (half of 9,600). With a marginal tax rate and social contributions, the tax difference amounts to hundreds, even thousands of euros each year.
The real regime requires accounting managed by a certified accountant. This cost, which is also deductible, is largely offset by the tax savings generated by depreciation, especially in the early years when loan interest adds to the depreciation annuities.
The calculation of depreciation in LMNP relies on technical choices (breakdown, durations, land share) that directly influence your taxation throughout the entire holding period, and now also at the time of resale. Taking the time to set up an accurate table from the first year avoids discovering too late that a component has been forgotten or that a depreciation carryforward has been poorly tracked.