Why you should not touch non-professional furnished rentals (LMNP)

And its disappearance would have worsened, among other things, the housing crisis suffered by the French, including seniors. For what ? In its necessary race to save money, the Finance Committee of the National Assembly wanted to do a double blow. Namely, tax the capital gains of all non-professional furnished rental companies and buy social peace between hotel chains and disruptive offers between individuals.

Fortunately, the triggering of article 49-3 of the Constitution giving the Government control over the constitution of the State budget overcame interference in this market which could have been catastrophic. Indeed, the LMNP status allows, through the depreciation of a property, to benefit from fully tax-free rental income. It is also an excellent tool for optimizing a family's financial resources. In times of uncertainty and high interest rates, real estate investments are secure in the sense that the value of the property acquired and the rents follow inflation and therefore make it possible to neutralize it.

Taxing rental companies, a counterproductive method

Flexible, this system, open to all individuals, is without constraints because its management is delegated to the company managing the real estate. It is perhaps even the last to benefit from legislative stability because the selected property does not need to be located in a defined area. Which is not the case with the Pinel law. Or even other tax regimes which, as soon as they are voted on, do not have time to produce their effects and are quickly reformed.

Furthermore, taxing rental companies more would have been counterproductive to the extent that the LMNP is a heritage management tool that responds to the Government's demands on the French. Namely, prepare for retirement effectively, build up capital in the real economy and over the long term, become an owner more easily, generate additional income quickly without increasing your taxes...To name just these few concrete examples.

Transparent taxation and income

Furthermore, the LMNP has always been extremely transparent. Thanks to amortization, the investor receives a rental yield of between 4 and 5%, fully tax-free for a period of 20 to 30 years or more, depending on the borrowing portion. In addition, if the property is acquired as part of a Serviced Residence for seniors for example, para-hotel services are often offered. The investor then also benefits from the reimbursement of 20% VAT on his acquisition.

Finally, where other investments experience losses, LMNP is very secure! It is possible to subscribe with a wealth management advisor or a banking advisor. To protect the investor, LMNP (Non-Professional Furnished Rental) status is most often accompanied by a rental guarantee. In a highly fluctuating regulatory and economic environment, the investor can therefore count on both a stable tax advantage and guaranteed recurring tax-free income.

Do not penalize senior housing

Finally, and this is undoubtedly the most important for us, a reform of the LMNP as it was planned, would have notably called into question housing for seniors, which represents a considerable social issue for decades to come. Indeed, the market is today divided between classic residences financially accessible to the wealthiest 15% of independent seniors and EHPADs which act as a foil for dependents. We need French people sensitive to old age who invest in alternative solutions such as Residential Villages for independent or dependent seniors. Reforming the LMNP would have led to questioning these more humane and more economical alternatives which are developing everywhere in France.

At a time when the Old Ages Act presents progress that is currently more than timid, the concept of residential villages for independent and dependent seniors represents a new response to housing for the elderly and an ideal placement. For the investor, rents are free, secure and tax-free and the investment is tax-free. Finally, for our seniors, it is an economic solution, freedom and dignity. Independent or dependent, everyone must be able to live at home as long as possible.

Tribune by Marc de Saint-Roman, President of SERENYA (LinkedIn).