Reselling a property under LMNP: steps, taxation and practical advice

Do you own a flat or house let as non-professional furnished accommodation (LMNP) and considering selling it? This transaction requires preparation: it is not only about finding a buyer, but also understanding the tax implications, the waiting periods, and the capital gains to declare. This guide details each step and helps you optimise your exit from the property.

What is the LMNP regime and why does it change the resale?

The LMNP regime (Louage de Meublés Non Professionnel, non-professional furnished letting) is a particular tax status for landlords who let a furnished dwelling without making it their main activity. Unlike a conventional unfurnished letting, you let the property with furniture, bedding and equipment.

This status offers advantages during letting (depreciation, deduction of expenses, property deficits). On resale, these advantages create obligations: you must declare capital gains under strict rules and conditions.

Why does taxation change?

A property under LMNP is not taxed like a conventional property. Depreciation deducted during letting reduces your tax base, which affects the calculation of the capital gain at the time of sale.

Key steps before selling

1. Check the period of operation

A central question: for how long have you operated this property under LMNP?

• Less than 5 years: you are under the full LMNP regime (depreciation, possible deficits). On resale, a significant share of the capital gain will be taxed as professional income.
• 5 years or more: you may have benefited from depreciation and deductions. The base for calculating the capital gain is reduced.

This period is crucial: an early exit (before 5 years) may create a higher tax bill.

2. Prepare your tax file

Gather:

• The deed of acquisition (purchase price, notary fees).
• Evidence of the depreciation declared (annual LMNP statements).
• Evidence of works and improvements (if you claim their deduction or spreading).
• The declared furnishings (detailed inventory).

These documents will allow your tax adviser to calculate precisely the taxable capital gain and income tax (or the micro-BIC).

3. Assess the tax impact of the sale

Taxation under LMNP on resale combines three taxes:

Income tax (capital gain)

The gross capital gain = sale price – purchase price – acquisition notary fees.

This capital gain is subject to income tax as non-commercial profits (BNC) or according to your declaration regime (micro, actual).

• Micro-LMNP: if your income does not exceed 77 700 € per year, you benefit from an allowance of 50 % on net rental income, and the capital gain is then taxed in parallel.
• Actual LMNP: you declare your actual expenses each year. The capital gain is subject to the progressive income tax scale.

Social contribution (CSG-CRDS)

A contribution of 17,2 % applies to the taxable capital gain, unless you are exempt (age, disability, etc.).

Transfer duties (notary fees on sale)

The seller does not pay these, but the notary fees on the sale are charged to the buyer (subject to conditions) and reduce the net amount you will receive.

4. Declare the furnishings

Furnished property (furniture, fittings) has a resale value. Depending on your scheme:

• Micro: you can declare this sale of furnishings separately (subject to less tax).
• Real: the sale of furnishings falls within your furnished-property BIC.

Do not forget them: they form part of your estate and must be declared and disposed of.

Taxation in detail: what you will actually pay

A practical example (for illustration)

You bought a T2 in LMNP for 200 000 € 7 years ago. You are selling it 250 000 €.

• Gross capital gain: 250 000 – 200 000 = 50 000 € (before purchase notary fees and depreciation deductions).
• If you had deducted a total of 15 000 € in depreciation, the taxable base before allowances: 50 000 + 15 000 (added back) = 65 000 €.
• Income tax (average rate, excluding your personal marginal rate): ~20 % = 13 000 €.
• CSG-CRDS : 17,2 % × 65 000 € = 11 180 €.
• Notary fees on the sale (buyer): ~3 % of the price = 7 500 € (not paid by you, but deducted from the net price).

Total tax borne by the seller: ~24 000 €.

This calculation is simplified: your personal circumstances (income, tax zone, regime) have a significant impact on the actual rate.

Pitfalls to avoid

1. Neglecting to declare past depreciation

If you had deducted depreciation while the property was let, the tax authority will add it back when calculating the capital gain. Make sure it is properly documented and declared: an error may lead to an adjustment.

2. Forgetting works and improvements

Works carried out during the letting period can reduce the capital gain (if they increase the resale value) or be spread over time. Keep every invoice.

3. Selling too soon

Reselling before 5 full years of operation under LMNP can maximise capital gains taxation. Wait if possible, unless it is urgent.

4. Confusing the micro and actual-expenses regimes

Under the micro regime, you benefit from allowances, but the capital gain remains taxable. Under the réel regime, the capital gain is taxed differently. Consult a chartered accountant to validate your exit strategy.

5. Overlooking VAT on furnishings

If you bought furnishings with VAT, resale is subject to standard VAT (20 %) unless a specific exemption applies. Be sure to document this part carefully.

Administrative steps for the resale

Before signing the deed of sale

1. Consult a chartered accountant: confirm your tax position and estimate the true cost of the sale.
2. Obtaining a property valuation: consult an estate agent or another professional to determine the sale price.
3. Check the condition of the property: arrange a survey (asbestos, electrical, gas, energy performance) if the property dates from before 2010.
4. Disclose the LMNP status: be transparent with potential buyers: the property is let furnished, which may affect their plans.

At signing

The notarised deed includes:

• The declaration of the value of the furnishings separately from that of the property.
• The reference to the LMNP regime (the notary informs the authorities).
• The notary fees, payable by the buyer.

After the sale

1. Tax declaration: you must declare the capital gain in your income tax return (annex n°2042C or 2035-A depending on your regime).
2. Closing of the file LMNP: inform your accountant; the property leaves your rented portfolio.
3. Payment of tax: the tax is generally collected with the following year’s tax assessment.

The alternatives: resell or continue?

Before proceeding, weigh up the pros and cons:

Resell now

Advantages:

• Realise your potential capital gain.
• Reduce your property portfolio if it is already full.
• Reinvest in another project (new-build, different region).

Disadvantages:

• Immediate taxation, sometimes substantial.
• Loss of future rental income.
• Transaction costs (notary, agency).

Continue letting

Advantages:

• Regular rental income.
• Potential future capital gain (property prices may rise).
• Continued depreciation (under the actual-expenses regime).

Disadvantages:

• Management of the property and tenants.
• LMNP declaration every year.
• Capital gain on resale (which builds up).

How JL HOME can help you

If you would like to explore an alternative before selling, JL HOME advises landlords on:

• Acquiring new properties under LMNP: tourist, student and senior residences offering suitable rental yields.
• The change of regime: switching from furnished letting to unfurnished letting (or vice versa), depending on your tax objective.
• The tax simulation: assess the real impact of a sale before you commit.

A JL HOME adviser can help you plan your exit strategy and optimise your property tax position.

Conclusion

Reselling a property in LMNP is a structured process that requires organisation and forward planning. The key steps are: check the length of operating history, gather your tax documents, estimate the real impact of the capital gain, and consult a chartered accountant. Avoid tax pitfalls by documenting every expense and not confusing the different tax regimes.

If you are planning an exit LMNP or considering a new-build investment in advance, book an appointment with an adviser JL HOME: we will review your strategy and help you optimise your long-term property tax position.