Under the French actual-expense regime, depreciation can reduce taxable profit from furnished letting. It is neither an automatic tax credit nor a cash expense, but a regulated accounting entry.
What may be depreciated
The building value, furniture and certain capital works may be spread over their expected useful lives. Land is not depreciable and must be separated from the property value. The building is generally allocated across components such as structure, roof, technical systems, fittings and furniture.
The key limitation
Depreciation cannot create or increase an LMNP loss attributable to depreciation. Any unused amount is carried forward under the applicable rules. Actual expenses—interest, insurance, management, maintenance or property tax depending on their nature—receive separate treatment.
A sound calculation method
Start with the acquisition cost and eligible purchase costs, then exclude the land value. Assign each component a defensible useful life. The calculation must be documented; copying a percentage from the internet creates unnecessary audit risk.
Resale consequences since 2025
France’s 2025 Finance Act changed the calculation of certain LMNP capital gains by bringing previously deducted depreciation back into the calculation, subject to statutory exceptions. The analysis must therefore include holding period and resale assumptions, not just annual tax savings.
The right process in 2026
Prepare a fixed-asset schedule from the outset, retain invoices and deeds, distinguish repairs from capital expenditure, and model both annual taxation and resale. For short-term alpine rentals, also review tourism classification, social contributions, CFE business tax and potential VAT exposure.
This article is for general information only and is not personalised tax advice. The applicable rules depend on the property classification, revenue and the taxpayer's circumstances. Seek advice from a French chartered accountant.
With ALPÉON, the owner receives the guaranteed rent set out in the lease, regardless of occupancy or the revenue generated by the chalet. ALPÉON provides records of rent paid; the accounting and tax treatment should then be confirmed by the owner’s accountant or tax adviser.