Thinking about an LMNP investment and trying to get your head around depreciation ? Good news, it’s still a major tax lever. The catch ? The 2025 Finance Act has introduced new rules. Here’s how to calculate your LMNP depreciation and optimise it effectively within the new framework.
Depreciation calculations : applying the component method
Now for the practical part. When it comes to depreciation, guesswork isn’t an option. Tax rules require assets to be depreciated using the component method, as defined by Article 311-2 of the French Plan Comptable Général.
What does this mean exactly ? You must break down the value of your property into separate components : the land (which is never depreciated), the main structure, interior fittings, technical installations and furniture. Each component is depreciated over its own useful life. For example, the structural elements are typically depreciated over 40 to 80 years, while furniture is usually depreciated over 5 to 10 years.
Piece of advice : depreciation by components is a technical exercise. Working with an LMNP specialist ensures each item is allocated accurately, allowing you to optimise tax relief while remaining compliant. In most cases, the benefits quickly outweigh the cost.
What changes under the 2025 LMNP reform
This is the turning point. Following the adoption of the Finance Act 2025 on 14 February, Article 24 introduces a new rule : depreciation deducted over time must now be taken into account when calculating capital gains on resale.
In other words, if €50,000 of depreciation has been deducted over a ten-year period and the property is sold at a significant capital gain, this amount will now increase the taxable base. The depreciation added back to the taxable baseis taxed at a combined rate of 36.2% (19% income tax and 17.2% social charges). Definitely food for thought.
Fortunately, there is an important exception. Serviced residences (student and senior residences) are excluded from depreciation recapture, meaning deducted depreciation will not be reinstated when calculating the capital gain. In addition, long-term ownership continues to benefit from progressive holding-period allowances, leading to full capital gains tax exemption after 22 years.
How to optimise your depreciation strategy
Given the recent regulatory changes, it is essential to revisit your strategy. For some projects, a family-owned property company may be worth considering, while the LMNP status remains an attractive option, as long as it is properly planned and managed.
Start by thinking long term. The longer you keep the property, the less costly the depreciation reintegration becomes. If you are looking to invest under the LMNP regime in the near future, serviced residences are another option to consider, as they are not affected by the reform.
On the practical side, don’t underestimate the value of expert support.The tax regime for furnished rentals has grown more complex with the 2025 LMNP reform. A qualified LMNP accountant will help you allocate assets correctly, plan for capital gains tax, and keep your tax returns fully compliant, reducing the risk of future adjustments.
Alliés Conseils helps you navigate your LMNP investment
Investing in LMNP is a true tool for tax optimisation, but it’s not straightforward. From splitting assets for depreciation to understanding the 2025 reforms and planning long-term strategies, professional advice can make all the difference.
At Alliés Conseils, we support investors like you every step of the way : personalised depreciation calculations, choosing the most suitable tax regime, full accounting management, and anticipating taxes on resale. We’re here to turn complexity into opportunity.
Want to make sense of your investment plans ? Reach out for an initial conversation. We’ll guide you in creating a solid, tax-optimised strategy without losing sight of what’s realistic.
