Micro-BIC or Régime Réel? How the Recent Rule Changes Hit Foreign Owners of French Holiday Lets

Rules in this area change often — this page is updated when they do.

France gives you a choice about how your furnished rental is taxed, and it's one of the few places in French administration where the taxpayer holds a genuinely valuable option. It's also, in my experience, the single decision foreign owners get wrong most often — usually by not realising they were making it. Silence is a choice here: do nothing and you're in micro-BIC by default, and since the 2024–25 reform, the default has become expensive.

The simple one: micro-BIC

You declare gross rents; the tax office applies a flat allowance meant to represent your costs, and taxes the remainder at your rate, plus social charges.

The catch is the size of that allowance now. For a non-classified tourist rental — which is what most foreign-owned Airbnb flats are — the allowance is 30%, and the regime is only available up to €15,000 of gross receipts. Read that again: you're taxed on 70% of your turnover, before a single euro of mortgage interest, condo fees or management costs is considered. Cross €15,000 in receipts and the regime isn't even available. Classified tourist rentals and standard long-term furnished lets kept a 50% allowance with a far higher ceiling, which is one good reason classification became fashionable again.

Micro-BIC still has a natural constituency: tiny incomes, no borrowing, allergy to paperwork. For everyone else, keep reading.

The powerful one: régime réel

Under the réel you deduct what the flat actually costs: management and platform fees, insurance, condo charges, repairs, loan interest, the accountant's own bill, travel to inspect your property. And then the item that changes everything: depreciation. French rules let you depreciate the building (not the land) and the furniture over their useful lives, as a bookkeeping expense, year after year, without spending a cent.

On a typical Nice apartment, depreciation alone often runs to a five-figure sum annually in the early years. Stack it on the real expenses and the taxable result of a perfectly healthy rental frequently lands at or near zero — legally, boringly, by design. That's the regime working as intended: it treats you as the small business you legally are.

The price of admission: real books and an annual tax package (form 2031), which in practice means a French accountant, typically a few hundred to a thousand euros a year — itself deductible. If your gross rents exceed six or seven thousand euros, the arithmetic almost always favours the réel, and the further above that you are, the less almost there is about it.

One 2025 change to know, in fairness: when you eventually sell, the depreciation you've deducted is now factored back into the capital-gains calculation for most furnished rentals. That softened — but did not remove — the réel's advantage: you still enjoy years of untaxed cash flow, the particuliers' capital-gains regime with its holding-period reductions still applies, and money deferred is money that worked for you in the meantime. Anyone telling you the réel "died" in 2025 hasn't done the maths; anyone ignoring the change hasn't read the law.

A worked sketch

Take €18,000 of gross short-let income on a financed two-bed. (Illustrative round numbers; your accountant will do the real ones.)

Micro-BIC isn't available at all — you're over €15,000 unclassified. Suppose you drop to €14,000 to stay eligible: taxable base €9,800, and with the non-resident minimum rate plus social charges you're writing a cheque of roughly €2,700 a year.

Régime réel on the full €18,000: deduct, say, €7,000 of genuine costs and interest, €9,000 of depreciation, taxable result about €2,000 — tax and charges in the mid-hundreds. And you kept the extra €4,000 of turnover you'd have had to forgo to stay in micro.

The spread between the two columns is the accountant's fee, several times over, every year.

How and when to choose

The option for the réel is exercised by notification to the tax administration, and the window matters: broadly, you opt before the spring filing deadline of the year concerned — miss it and you're locked into another year of the default. New owners can opt from the start when registering. The option then runs and renews; you're not re-deciding annually unless you want out.

Non-resident practicalities: yes, this all works from abroad; yes, the accountant files electronically; no, you don't need a French bank account for the privilege. What you do need is the discipline to keep every invoice — or someone who keeps them for you, which (small cough) is one of the things I handle inside my accountant-ready pack.

The short version

Non-classified micro-BIC at 30% is now a regime for hobbyists. If your Nice flat earns more than pocket money, the réel — real costs, plus depreciation, minus a modest accounting fee — usually wins by a wide margin, even after the 2025 capital-gains change. And if you've been in micro by default since before the reform: the maths has moved, even if you haven't. Spring deadline. Diary entry.

Rules as of July 2026, general information rather than tax advice — thresholds and allowances in this area have changed nearly every year lately. For your numbers, use a French accountant; I work with an English-speaking one in Nice who does LMNP for non-residents all day, and introductions are free.

FAQ

I'm under €15,000 of rent. Should I just stay in micro-BIC? Maybe — if your real costs plus depreciation are unusually low (no loan, new flat, low charges). For most financed or older flats, run the comparison once; the answer tends to be emphatic.

What exactly can be depreciated? The building (excluding land value), works and improvements, and furniture — each over its own useful life. It's a paper expense: nothing leaves your pocket.

Does classification as meublé de tourisme change the picture? It restores the 50% micro allowance and a higher ceiling, so it makes micro respectable again for simple situations. Classification takes an inspection and some paperwork, and it stacks nicely with the tourist-let strategy generally.

Can I switch back from réel to micro? Yes, subject to notice periods and staying under the thresholds. In practice, few owners who've seen a zero-tax year volunteer to leave.

Does the réel require a French accountant specifically? The filings are French-format and French-language, so effectively yes. The fee is deductible, and a good one pays for themselves in the first meeting.