Capital gains on selling a French furnished rental: the 2025 reform
The Loi Le Meur has ended the quietest tax break in furnished letting: on resale, depreciation already deducted is now added back into the capital-gains calculation. It is a shift every landlord should anticipate — sometimes years in advance.
What the Loi Le Meur changed on 1 January 2025
Until 2024, France's non-professional furnished rental regime (LMNP) under the réel method offered a unique tax break: the depreciation deducted each year from rental income was never added back when calculating the capital gain on resale. In practice, an owner could wipe out most of their taxable rent during ownership, then sell with the gain still measured against the original purchase price. The Loi Le Meur of 19 November 2024 ends this 'double benefit' for every sale completed from 1 January 2025 onward. Depreciation already claimed now reduces the acquisition price used in the calculation, mechanically increasing the taxable gain. For a furnished tourist rental held and depreciated over several years, the impact can run into tens of thousands of euros. It is a major shift no investor should discover on completion day.
How the capital gain is now calculated
The principle is easy to state. The gross gain is still the sale price minus the purchase price — but that purchase price is now cut by the depreciation claimed during ownership. Take a studio bought for €200,000 and sold for €280,000 after ten years, with €60,000 of depreciation deducted. Before the reform, the gross gain was €80,000. Now the adjusted purchase price falls to €140,000, lifting the gain to €140,000. Holding-period reliefs then apply, erasing income tax after 22 years and social charges after 30. The headline rate before relief stays at 36.2% (19% income tax plus 17.2% social charges). On this example, the extra tax from the add-back approaches €17,000 after holding-period relief. The maths deserves to be modelled well before you list the property for sale.
Who is affected — and the exceptions
The reform targets furnished landlords — professional (LMP) and non-professional (LMNP) alike — taxed under the réel regime, meaning anyone who depreciates their property. Owners on the micro-BIC flat-rate allowance, who claim no depreciation, are not affected by the add-back. Lawmakers did, however, carve out notable exceptions: sales of units in eligible serviced residences (student, senior and care homes) remain exempt. For a standard furnished tourist rental in the mountains or in Lyon, the new rule applies in full. Importantly, the gain is still computed under the private-individual regime, with its holding-period reliefs, not the professional capital-gains rules. Holding the property for the long term therefore remains the most powerful lever to neutralise the tax — time progressively erases the taxable base, add-back included.
Three levers to optimise your sale
Three levers can soften the blow. First, the holding horizon: beyond 22 years income tax disappears, and at 30 years social charges go too — at which point the add-back is irrelevant. Second, managing depreciation itself: an accountant can calibrate the share claimed each year around your exit strategy, rather than mechanically maximising the deduction. Third, the choice between micro-BIC and réel must now factor in the eventual sale, not just current income. At SmartStay, we don't replace your tax adviser — we give them reliable data: detailed monthly reporting, a full income-and-cost history, and year-on-year rental performance tracking. A well-run, well-documented and highly profitable property remains the easiest asset to arbitrate, whether you choose to keep it or sell it on the best possible terms.
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