Buy-to-let in France in 2026: unfurnished or LMNP, yield, mortgage and tax

• Unfurnished: micro-foncier up to €15,000 of rent (30% allowance), otherwise the real regime, with a deficit deductible from total income up to €10,700 a year.
• LMNP: micro-BIC up to €83,600 of takings (50% allowance), or the real regime with depreciation; since February 2025, depreciation is added back into the capital gain on resale.
• New in 2026: the private landlord status lets you depreciate a new home let unfurnished, at 3.5% to 5.5% a year, capped at €8,000 to €12,000 per household.
• Mortgages: 3.32% on average in September 2026 according to the Banque de France, with debt-to-income capped at 35% and terms at 25 years.

Buying to let remains a favourite investment in France: a tangible asset, largely financed by the bank and by tenants. But the profitability of a buy-to-let comes down to details the listings do not show: the purchase price and fees, the mortgage rate, running costs, empty months and, above all, the tax regime chosen, which can take the annual tax bill from more than €3,000 to zero for the same rent.

This guide explains how buy-to-let investing works in France, how to calculate its yield and how it is financed in 2026, then compares unfurnished and furnished letting with a worked example. It covers the new private landlord status, the draft article 7 of the 2027 budget on LMNP, and the risks to know. The rules quoted come from service-public.fr, the French tax code and the Banque de France, with their dates.

How buy-to-let investing works

The principle is simple: you buy a home, often borrowing most of the price, and you let it. The rent covers part of the monthly repayment, the costs and the tax; the rest, if any, comes out of the owner's pocket each month. After fifteen or twenty years, the mortgage is repaid and the owner holds a property worth whatever the market pays for it on that day.

This is called leverage: the bank finances an asset whose income repays the debt. It works when the property's yield, after costs and tax, comes close to the mortgage rate or exceeds it, or when the property's price rises. It turns against you when rents fall, the home stays empty or prices drop, because the debt does not shrink.

Calculating the yield of a buy-to-let

There are three yields. The gross yield divides annual rent by the purchase price. The net yield takes off the costs paid by the owner (property tax, non-recoverable service charges, insurance, upkeep) and adds the purchase fees to the price. The after-tax yield also takes off income tax and social charges, which depend on the tax regime.

Take an example, with assumptions to adapt to each project: a flat bought for €180,000, plus €14,000 of purchase fees, let at €800 a month, with €2,000 a year of costs borne by the owner (€1,000 of property tax, €500 of non-recoverable service charges, €150 of insurance and €350 of upkeep).

A 3.92% net yield should be compared with what effortless investments pay in France: 1.7% for the Livret A since August 1, 2026, and 2.63% for euro funds in 2025, as the guides to French savings accounts and assurance vie explain. Buy-to-let takes time, carries risk and cannot be sold in one click: its yield has to pay for that.

Financing a buy-to-let in France in 2026

The average rate on new home loans was 3.32% in September 2026, excluding renegotiations, according to the Banque de France, against 3.09% a year earlier. Banks also apply the rules of France's High Council for Financial Stability (HCSF), binding since 2022: a debt-to-income ratio of at most 35%, insurance included, and a term of at most 25 years (27 with a deferral for a home under construction). They may depart from these rules for 20% of their loans, but most of that leeway is reserved for main homes, according to the HCSF's FAQ.

In our example, the deposit covers the fees and €20,000 of the price, and the bank lends €160,000 over 20 years at 3.32%. The monthly repayment comes to €913 excluding insurance, and the loan costs €59,169 of interest in total, €5,225 of it in the first year. With €800 of rent and €167 of costs a month, the owner tops up €280 a month before tax: that is the savings effort. Many banks also count only part of the expected rent, often 70%, when calculating the debt-to-income ratio.

Unfurnished or furnished: two tax regimes

Unfurnished letting: property income

Rent from a home let unfurnished is property income (revenus fonciers). Up to €15,000 of rent a year, the micro-foncier regime applies: the tax office takes off 30% for costs, and the rest is taxed at the income tax scale and at social charges, which stayed at 17.2% in 2026. You can opt for the real regime, for at least three years, and deduct actual costs: mortgage interest, property tax, insurance, maintenance and improvement works, and management fees, according to service-public.fr (in French).

When costs exceed rent, the real regime creates a property deficit, deductible from total income up to €10,700 a year, excluding mortgage interest. The limit rises to €21,400 for energy-renovation works that move a home from class E, F or G to class A, B, C or D, paid by December 31, 2027. The surplus is carried forward against property income for the next ten years.

Non-professional furnished letting (LMNP)

Rent from a furnished home counts as business income (BIC). You remain a non-professional landlord as long as the household's takings stay under €23,000 a year, or under its other earned income, according to service-public.fr. Under micro-BIC, the allowance is 50% up to €83,600 of takings for a long-term let or a classified tourist let, but only 30% up to €15,000 for an unclassified tourist let.

The real regime is what makes LMNP attractive: on top of costs, you deduct depreciation, meaning the accounting wear of the building (excluding land) and furniture, spread over their useful life. Depreciation cannot create a deficit, but the unused part is carried forward. As a result, for many years, the rent from an LMNP under the real regime often pays neither income tax nor social charges. In return, since February 15, 2025, the depreciation deducted reduces the purchase price used to calculate the capital gain on resale (article 150 VB of the French tax code), which raises the tax on the day of the sale. And social charges on LMNP income rose to 18.6% in 2026, according to service-public.fr.

Worked example: the same home, four regimes

Back to the flat with €9,600 of rent and €2,000 of costs, for an owner in the 30% marginal tax band, in the first year of the mortgage (€5,225 of interest). For the furnished option, we assume the same rent and €5,000 of furniture, depreciated over seven years, with the building depreciated over thirty years, at 80% of the price excluding land.

The same home therefore costs between €0 and €3,172 of tax a year depending on the regime, which moves the after-tax yield from 3.9% to 2.3%. The real regime requires accounts, often handled by an accountant whose fees are deductible. And the LMNP advantage is partly paid back on resale, with a capital gain calculated on a purchase price reduced by depreciation. The compound interest calculator helps compare that yield with a financial investment over the same period.

The private landlord status: what changes in 2026

The 2026 Finance Act created depreciation for unfurnished letting, known as the private landlord status (statut du bailleur privé) or “Relance logement”. It covers homes in a block of flats, bought new or under construction, or older homes with renovation works worth at least 30% of the price, acquired between February 21, 2026 and December 31, 2028. The owner commits to letting unfurnished, as the tenant's main home, for at least nine years, within rent and tenant income ceilings, under article 31 of the French tax code.

Depreciation applies to the price excluding land, with land counted at a flat 20%. It is capped at €8,000 a year per tax household, raised to €10,000 or €12,000 if at least half the rent comes from social or very social letting. For a new home bought for €200,000 and let at an intermediate rent, the deduction is €160,000 × 3.5% = €5,600 a year, on top of deductible costs. As with LMNP, this depreciation is added back when calculating the capital gain on resale. The Pinel scheme, which offered a tax reduction, ended on December 31, 2024.

LMNP: what the draft 2027 budget plans

Article 7 of the draft 2027 Finance Bill would limit depreciation of LMNP homes to 2.5% a year, with no more than €7,000 a year per tax household, and to 1.5% and €5,000 for a tourist let. Depreciation not deducted could no longer be carried forward. In our example, building depreciation would fall from €4,800 to €3,600 a year, still enough to wipe out the tax in the first year; the €7,000 cap would mainly affect properties whose depreciable building value exceeds €280,000.

It is only a proposal. MPs had removed the cap by amendment, but the National Assembly rejected the first part of the budget on November 4, 2026, by 458 votes to none, which brings down the whole text: it is the government's version, cap included, that the Senate is now examining. This guide will be updated once the 2027 budget is adopted.

The risks of a buy-to-let

• Empty months and unpaid rent: one month without a tenant wipes out a twelfth of the year's rent, and unpaid rent can last months.
• Works: roof, facade, boiler, decided by the building's co-owners or forced by the property's age, unrelated to the rent.
• The energy rating (DPE): homes rated G can no longer be let since January 1, 2025, F-rated homes will follow in 2028 and E-rated ones in 2034. The DPE calculation changes on January 1, 2027 for electrically heated homes, which will lift some of them.
• Resale: it takes months, costs fees, and the price depends on the local market when you sell.
• Concentration: a single property often makes up most of one's wealth and debt, in a single town.

Buy-to-let is not the only way to hold property: you can also go through shares in property companies (SCPIs), or invest in more liquid financial assets. The guide on where to put your money ranks these options by the horizon of each sum, and the one on the MSCI World and S&P 500 indices presents the stock market alternative.

This guide is educational and is neither tax advice nor personalized investment advice. The example figures are assumptions. A property investment carries a risk of capital loss. The rules quoted are those in force in November 2026, and the 2027 budget may change them.

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