Limits on depreciation deductions are proposed. France’s initial 2027 budget bill proposes caps for non-professional furnished lettings under the actual-expense regime. Depreciation gradually allocates an asset’s cost when calculating the taxable result; it is not a new cash expense. These are not current caps: this article covers the initial bill and a separately verified committee amendment.
What changes are proposed to depreciation deductions for furnished lettings in France?
Caps on deductions are proposed. Article 7 of France’s budget bill No. 3210 proposes separate limits on deductions for depreciation of premises used for non-professional furnished lettings under the actual-expense regime. A lower limit is proposed for tourist accommodation. Both combine a percentage and a maximum annual amount per tax household; they are neither tax rates nor promised savings.
Bill No. 3210 is at first reading. According to the official dossier, plenary debate is scheduled to begin on 13 October. Finance Committee report No. 3291 was tabled on 10 October, but Volume II examining the budget’s first part is marked as not yet published on 11 October. The proposals below are from the initial Article 7, tabled on 1 October; they are not consolidated wording following committee examination.
On 8 October, the committee adopted amendment CF1588, proposing exemptions from depreciation caps and carry-forward restrictions for accommodation under specified residential leases, and accommodation for students and the young people in training listed in the amendment. This is a committee decision, not final legislation; the table below shows the initial proposal.
Non-professional furnished letting (LMNP in French tax documents) allows depreciation deductions under the actual-expense regime (régime réel). Under the simplified regime (micro-BIC), expenses are covered by a flat-rate allowance against income, with no separate depreciation deduction. The limits below should not be applied to a calculation under the simplified regime. French tax authority — the different regimes.
| Type of letting | Proposed limit on the premises’ depreciation rate | Maximum annual premises- depreciation deduction per tax household |
|---|---|---|
| Non-professional furnished accommodation, excluding tourist accommodation | 2.5% | €7,000 |
| Meublé de tourisme — tourist accommodation within non-professional furnished lettings | 1.5% | €5,000 |
These are figures from the initial budget bill, Article 7, not current limits. Do not multiply the annual maximum by the number of apartments: the cap is expressed per tax household.
The percentages concern depreciation of premises, not rental yields. They cannot automatically be applied to the entire purchase price: accounting separates the depreciable building value from land, which is not depreciable. Official French tax guidance, paragraph 58 — separating building and land values.
In the initial bill, exceptions attach to the specific categories of residences and establishments in subparagraphs 1°–3° of proposed Article 39 C, Part I, point 2, reproduced in Article 7 of the bill. These include certain student and older-person residences, social and medico-social establishments, and long-term medical-care establishments. Serviced residences must meet specific status and authorisation conditions. A management company or a “serviced residence” label alone does not establish eligibility.
Why is depreciation different from cash expenditure when letting in France?
It is an accounting treatment, not a new payment. Depreciation allocates an asset’s cost over its useful life; it is not a new annual payment by the owner. In France, under the actual-expense regime, allowable depreciation may reduce the taxable result. It does not pay for cleaning, repairs or a loan, or show how much cash remains after letting an apartment.
The tax authority’s current guidance states that the depreciation deduction is limited to rental receipts less the activity’s other expenses and cannot itself create a tax loss. For an individual calculation, an accountant determines the depreciable value and allowable deduction. Compare the cash result of ownership and the taxable result separately.
What is proposed for undeducted depreciation in France?
Transitional treatment and carry-forward restrictions are proposed. These proposals in France’s initial 2027 budget bill concern non-professional furnished lettings under the actual-expense regime.
For depreciation already recorded but not deducted for accounting periods ending before 1 January 2027, France’s initial budget bill proposes transitional use through the end of 2036. The deduction would be limited to half the taxable result after applying the proposed current-period restrictions. This does not permit the entire accumulated balance to be written off at once or promise that all of it can be used.
For periods ending on or after 1 January 2027, the proposal would end the carry-forward of unused depreciation for non-professional furnished lettings. Both provisions must still be assessed against the final legislation. For a property already let, the period-end date and documented accounting balance matter; for a new purchase, compare a calculation incorporating the proposed restrictions.
How should I assess a rental purchase before the budget is adopted in France?
Compare two scenarios. Compare current-law calculations with a separate scenario based on the bill, keeping occupancy, personal use and cash-cost assumptions the same. Foreign tax residence alone does not determine non-professional furnished-letting status: the French tax authority considers the activity and tax household’s circumstances. Nonresidents’ obligations need a separate check.
What to check next
Next, establish whether the proposed letting arrangement suits the chosen home. The second-home letting guide covers municipal requirements, building rules, dates and costs. To discuss a property with IMMO BTC, provide its listing link and your intended personal-use and letting calendar; an individual tax calculation should then be checked with the relevant specialist.
Sources: Assemblée nationale — initial budget bill No. 3210, Article 7, tabled on 1 October; impots.gouv.fr — furnished-letting tax regimes; impots.gouv.fr — nonresidents’ furnished-letting obligations; Official French tax guidance — commentary dated 19 August 2026, paragraph 58. This article covers Article 7 of the initial bill dated 1 October 2026 and, separately, adopted amendment CF1588. Listed sources checked on 11 October 2026.
