Investing in the LMNP or non-professional furnished rental interests more and more owners nowadays. And for a good reason, the concept would be much more profitable than a classic rental, i.e. empty. In order to understand the different aspects of furnished rental, it is essential to have a good understanding of how the system works, especially in terms of taxation. However, in spite of the difficulty of understanding the essence of the concept, the LMNP presents many advantages. So, without further ado, let’s dive into this blog and learn everything you need to know about investment via LMNP.
Vacant rental and furnished rental, what is the difference?
There are many types of real estate rental. The empty rental, the professional and non-professional furnished rental. If fundamentally, the concept is the same, the concepts differ on certain points. In a rental investment, the taxes on the rent are defined by the amount of the rent once the charges are deducted. The main difference lies in taxation.
The property income or rental income
We usually speak of land income in a rental property called empty rental. The income from this type of rental is subject to income tax. This concerns all types of dwellings or premises as soon as they are rented empty.
The BIC or industrial and commercial profit
Industrial and commercial profit usually concerns the income generated by commercial, industrial and artisanal activities. However, this status is also applicable in the field of real estate: the non-professional furnished rental or LMNP. Moreover, the tax system for this type of rental is more advantageous on several points.
Why opt for the non-professional furnished rental?
The main advantage of the non-professional furnished rental lies in the taxation. However, this is not systematic. Indeed, the benefits are more or less felt according to the different contexts. In addition to the numerous advantages, investing in non-professional furnished rental must, above all, be aimed at specific objectives. For some, it represents a complementary and easy-to-manage income. For others, it is mainly a way to protect their property. In this case, before investing in an LMNP, it is essential to understand how it works.
The rent received as BIC.
It is certainly the main advantage of the non-professional rental. Indeed, even if there are no big differences in the rents of empty and furnished premises, the latter is more advantageous at the level of taxation. Industrial and commercial profit has more deductible expenses, which can make a big difference.
The more advantageous lump-sum allowance
The concept of the flat-rate allowance is also one of the advantages of non-professional furnished rental. It is part of the many amortizations that this status benefits. Indeed, for a landed income, the amount of the abatement constitutes 30% of the rent, whereas, for an LMNP, it is 50%.
More important deductible charges
In the case of a non-professional furnished rental, the deductible expenses are more important. This allows reducing considerably the taxes to be paid for the rents. This is part of the amortization provided by law in this area.
The ease of finding tenants
In practice, opting for furnished rentals is more advantageous for finding tenants. However, contrary to the usual rental conditions, the furnished premises differ on several points. They usually concern the duration of the lease (9 years minimum) and the notice period (1 month) (against 3 months normally).
Non-professional furnished rental, which uses is concerned?
Do you wish to invest in LMNP rental? Many options are available to you in this case. Indeed, this type of rental concerns premises, new or old, used for commercial activities or individual residences. This includes business residences, residences for seniors, students, etc.
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