What is a Property Purchase Under the LMNP Status? How can you get the 20% VAT Back on the Purchase of Your Property?

Date Posted:Wed, 1st May 2024

What is a Property Purchase Under the LMNP Status? How can you get the 20% VAT Back on the Purchase of Your Property?

This involves the acquisition of a property while respecting the conditions which allow you tobenefit from the non-professional furnished rental property system. It is a unique and veryadvantageous regime that allows you to pay no or a few tax on the money earned from renting.Moreover, this system allows you to recover the 20% VAT of the price of your dwelling includingall taxes.

 

The main conditions to respect are:

- The purchased property must have residential use 

- To offer the property for rent 

- Check that this rental does not represent the most important part of the income of the investor (in this case, investor can be requalified in professional furnished property - LMP).

- The property must be equipped and furnished (a property is considered as such when the future occupants, when they move in to the property, would only need to bring their personal belongings).

 

For your property to qualify as “furnished property”, your home must be furnished with furniture which is required in everyday life by the tenant. It must meet a level of comfort and convenience,and it also must meet the essential needs. 

The tax status of the furnished rental property allows to deduct amortizations as thedepreciation of time on furniture. Acquisition costs (transfer, notary, agency, …) are combinableand postponed ; tax deficits are not attributable to the total income carried on over 10 years.The most interesting thing is that you deduct your expenses and amortize your apartment andfurniture. In 98% of cases, the real system allows you to not pay tax on the property for 20 years !