Income from furnished rentals: automatic deduction or actual expense method? Which method is more advantageous?
Your 2025 income tax return for furnished rental property will automatically fall under the micro-BIC regime in the following cases:
- For income from non-commercial furnished rentals and classified furnished vacation rentals, the income threshold is €77,700, and the automatic deduction is 50%.
- For income from unclassified furnished vacation rentals, the income threshold is €15,000, and the automatic deduction is 30 percent.
For furnished rentals, the actual expense method is much more advantageous than the micro-BIC method because, in addition to deducting actual expenses, it allows for the depreciation of the rented property.
This depreciation will drastically reduce the taxable base for rental income and often allows property owners to avoid paying income tax on rental income for 10 to 15 years.
Don’t miss the deadline: The option to file under the actual income tax system for 2025 income must be chosen between May 22 and June 5 (the deadline for filing tax returns, which varies by department).
There are no specific formal requirements: You can make this selection directly through your impôts.gouv account.
For BIC income received in 2024, the deadline for electing this option has passed. The deadline was in May/June 2024 (depending on the taxpayer’s department). It is therefore no longer possible to elect this option for income received in 2024.
