France's 2027 Budget Bill and LMNP: What Changes for Furnished Holiday Lets

France's draft budget for 2027 (the projet de loi de finances pour 2027, or PLF 2027), filed with the National Assembly on 1 October 2026, proposes to cap the depreciation that non-professional furnished landlords (LMNP) taxed under the actual-expenses regime can deduct: 2.5% a year and €7,000 per tax household for ordinary furnished lets, and only 1.5% and €5,000 for a furnished holiday let (meublé de tourisme). It would also end the unlimited carry-forward of depreciation that could not be used. As of 8 October 2026 this is only a bill: the floor debate starts on 13 October and the final vote is expected in December.

Two rules already apply whatever happens to the bill. Since 15 February 2025, the depreciation you deducted is added back to your taxable gain when you sell. And the simplified micro-BIC regime for furnished holiday lets is capped at €15,000 of yearly receipts (30% allowance) for an unclassified property, and at €77,700 for 2025 income, then €83,600 for 2026 income (50% allowance), for a classified one.

This article reflects the situation on 8 October 2026 for a bill still under debate. It is general information, not tax advice: have your situation checked by a French chartered accountant (expert-comptable).

Does this concern you if you live outside France?

In most cases, yes. Income from a property located in France is generally taxed in France, including when the owner lives abroad, and a furnished let is taxed as BIC (business) income. Most owners who rent a furnished flat or house to holidaymakers are LMNP: non-professional furnished landlords. They choose between two regimes:

• Micro-BIC: you declare your gross receipts and a flat allowance is applied. No depreciation is deducted, so the proposed cap would not affect you directly.
• Régime réel (actual expenses): you deduct your real costs plus depreciation of the property and furniture, usually with an accountant. This is the regime the bill targets.

What does the 2027 budget bill propose for LMNP depreciation?

The measure sits in article 7 of bill no. 3210, titled "Redirecting public support towards family and long-term housing". It amends article 39 C of the French tax code. In the version filed by the government:

• General cap: when furnished letting is not a professional activity, depreciation of the dwelling is deductible only up to a rate of 2.5% a year, and no more than €7,000 a year per tax household.
• Holiday-let cap: when the dwelling is a furnished holiday let as defined by the French tourism code, the rate drops to 1.5% and the ceiling to €5,000 a year per tax household.
• End of the unlimited carry-forward: today, depreciation that cannot be deducted (it is not allowed to create a loss) is carried forward with no time limit. For financial years closed from 1 January 2027, the unused part would be lost.
• Existing stock: depreciation carried forward from years closed before 1 January 2027 would stay deductible until 31 December 2036, limited to half of each year's taxable profit.
• Exclusions: residences for students, young people in training or people over 65, care homes and other medico-social establishments, and long-term care facilities.

Professional furnished landlords (LMP) are not covered. The government presents the measure as bringing furnished and unfurnished lettings closer together, after the 2026 budget created a depreciation scheme for unfurnished lets at affordable rents (the "Jeanbrun" scheme).

Why are furnished holiday lets hit harder?

The bill targets the meublé de tourisme as defined in article L. 324-1-1 of the tourism code: a furnished dwelling let to passing guests who do not make it their home, by the day, the week or the month. That covers most Airbnb, Booking.com and Vrbo listings, classified or not. For these properties the allowed rate (1.5%) would be 40% lower than for other furnished lets (2.5%), and the euro ceiling lower too (€5,000 against €7,000).

If you own several properties, note that the euro ceiling applies per tax household, not per property. Two holiday lets owned by the same household would share the same €5,000 a year.

A worked example

Take a flat let as a furnished holiday let, with a depreciable building value (land excluded) of €200,000, and assume your accountant currently deducts €6,000 of depreciation a year on that building.

• With the 1.5% cap, the deduction would fall to €3,000 a year. If your profit allowed the full deduction before, your taxable profit would rise by €3,000 every year, subject to income tax and social levies.
• With a €400,000 building, 1.5% gives €6,000, but the ceiling would bring the deduction down to €5,000.
• With two flats at €200,000 each, 2 × €3,000 = €6,000, brought down to €5,000 for the whole household.

The bill refers to depreciation of the dwelling itself. Ask your accountant how it would apply to your renovation works and furniture.

When would the cap start to apply?

Most analyses published since the filing read it as applying to financial years closed from 1 January 2027, so to 2027 income declared in 2028. That matches the carry-forward dates in the bill. However, article 7 sets no start date for the cap itself, and article 33 of the bill provides, by default, entry into force on 31 December 2026 for taxes triggered by the end of the year or the closing of the financial year. Whether 2026 or 2027 is the first year affected is a point to watch during the debate.

Until the vote, current rules apply. If the bill passes as filed, the depreciation you have not been able to deduct by the close of your 2026 financial year would form the stock usable until 2036: it is worth having that figure calculated now.

What is already in force?

Depreciation added back on resale (since 15 February 2025)

The 2025 budget law (law no. 2025-127 of 14 February 2025, article 84) changed how LMNP capital gains are calculated: the depreciation deducted during the letting period reduces the purchase price, which raises the taxable gain by the same amount. In a ministerial answer published on 24 March 2026, the government confirmed that the rule covers sales made from the day after the law was promulgated, whatever the date the property was first let, and that all depreciation deducted is taken into account, subject to the allowances for length of ownership.

In practice, depreciation lowers your tax while you let, but part of the benefit is taken back when you sell. If the 2027 cap is voted, you would deduct less each year, and there would also be less to add back on resale. Only a simulation over the whole holding period tells you whether the actual-expenses regime still pays off.

Micro-BIC thresholds by income year

Since 2025 income, the micro-BIC regime is less generous for furnished holiday lets. According to service-public.fr (news item of 27 July 2026):

• 2025 income (declared in 2026): €15,000 of receipts and a 30% allowance for an unclassified holiday let; €77,700 and a 50% allowance for a classified one.
• 2026 income (declared in 2027): €15,000 and 30% unclassified; €83,600 and 50% classified.

Above these thresholds, the actual-expenses regime is mandatory. The 2027 bill as filed does not change these thresholds or allowances. Remember that they are measured on gross receipts, before platform fees: our guide to Airbnb's 15.5% host-only fee shows how a price increase can push you over €15,000 without earning more.

What could still change during the debate?

A lot. According to specialist LMNP tax websites (updates of 8 October 2026), the National Assembly's finance committee adopted amendments that refocus the measure on short stays: one would exempt furnished homes let under a main-residence lease or a mobility lease, another would remove depreciation altogether for furnished holiday lets bought from 1 January 2027. We could not yet check these on the Assembly's website when writing. And for a budget bill, the floor debate starts from the government's text: a committee amendment must be adopted again in plenary to enter the bill.

• 13 October 2026: floor debate starts at the National Assembly.
• Mid-November (announced calendar): Assembly vote on the whole bill, then examination by the Senate.
• December: joint committee and final reading. The Constitution gives Parliament 70 days from the filing, so until 10 December 2026; after that the government can enact the budget by ordinance.

The Constitutional Council can still be asked to review the law before it is promulgated. To follow amendments and votes, the reference is the PLF 2027 legislative file on the National Assembly's website.

What should owners of furnished holiday lets do now?

1. Simulate both regimes. Compare micro-BIC and actual expenses on your 2026 and 2027 income, with and without the cap, and add a resale scenario that includes the depreciation add-back. For an unclassified property, the micro-BIC allowance is only 30%: the actual-expenses regime can still win, even capped, if your real costs are high.
2. Have your carried-forward depreciation calculated. If the stock is large, the 2036 deadline and the half-of-profit limit change what it is really worth.
3. Look at classification. Under micro-BIC, a classified property gets a 50% allowance and a much higher threshold than an unclassified one. The bill's depreciation cap, on the other hand, covers all furnished holiday lets, classified or not.
4. Keep clean records from now on. Receipts per property and per platform, commissions, cleaning fees, tourist tax, invoices for works and furniture: your accountant needs them for the simulation.
5. Wait for the vote before any structural decision. Selling, switching to long-term letting, setting up a company or changing regime are hard to undo, and the text can still change. Our comparison of short-term and long-term rental profitability helps frame that choice once the rules are final.
6. Talk to an accountant before your 2026 year-end. The start date and the amendments should be clearer in December, and your 2026 closing fixes your carried-forward stock.

For the method behind a full profitability check (revenue, costs, occupancy), see how to calculate Airbnb profitability, and for the wider tax picture, our guide to Airbnb taxes.

Which figures should you prepare for your accountant?

• Gross receipts per property and per year: this is what counts for the micro-BIC thresholds.
• Platform commissions, cleaning fees and tourist tax collected, booking by booking.
• Invoices for charges, works and furniture, plus your depreciation schedule and carried-forward stock.

If your bookings run through Nowistay, these figures are already in one place. The Bookings page exports a CSV filtered by property and date range, with the amount, platform commission, cleaning fee and taxes for each stay. The dashboard shows revenue, commissions and occupancy for one property or the whole portfolio, and every booking has a downloadable PDF invoice. See how to export bookings as CSV and how to generate guest invoices.