How to create a LMNP status?
This article will detail how to complete LMNP steps one by one to ensure a smooth registration process for LMNP status.
Creating a non-professional furnished rental (LMNP) status is the preferred choice for many landlords, as it offers various tax benefits and legal protections. However, to successfully register for LMNP status, several important steps need to be completed. From declaring the activity to choosing the appropriate tax regime and contacting the Business Tax Service (SIE), each step is crucial.
This article will detail how to complete these steps one by one to ensure a smooth registration process for LMNP status.
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Table of Contents
- Introduction
- Step 1: Fill Out Form P0i to Declare the Start of LMNP Activity
- Step 2: Choose the Tax Regime: Real Regime or Micro-BIC Regime
- Step 3: Contact the Business Tax Service (SIE)
- Questions and Answers
- Summary
Step 1: Fill Out Form P0i to Declare the Start of LMNP Activity
To start an LMNP activity, you must first register with the Business Formalities Center (CFE) within 15 days of the start of the lease. This process is managed by the Commercial Court affiliated with your real estate property. You will need to fill out Form P0i, also known as Cerfa n°11921*06, which can be found on the impots.gouv website.
1.1 Obtain the SIRET Number
The main purpose of filling out Form P0i is to obtain the SIRET number, which is a crucial identifier for the legal existence of your LMNP activity. With this number, you can sign lease contracts and officially engage in furnished rental activities. It's important to note that applying for an LMNP SIRET number is entirely free of charge.
1.2 Report Tax Regime
In Form P0i, you will also need to choose your tax regime, which will determine how your taxes are calculated. Correctly filling out and submitting Form P0i will ensure that your LMNP activity is formally recognized and lay the foundation for subsequent steps.
Step 2: Choose the Tax Regime: Real Regime or Micro-BIC Regime
Under LMNP status, you have the option to choose between two different tax regimes: the real regime or the Micro-BIC regime. Each regime has its pros and cons, and choosing the right one is key to maximizing tax benefits.
2.1 Micro-BIC Regime
If your rental income does not exceed €72,500, the Micro-BIC regime is a good option. Under this regime, your taxable income is calculated after a 50% deduction. This makes furnished rental more advantageous than unfurnished rental, where the deduction is only 30%.
2.2 Real Regime
If your rental income exceeds €72,500, you will need to opt for the real regime. Under this regime, you can deduct all expenses related to furnished rental, including depreciation, acquisition costs, loan interest, maintenance, and repair costs. This regime is suitable for landlords with higher rental income and more expenses.
Step 3: Contact the Business Tax Service (SIE)
The final step in registering for LMNP status is to contact the Business Tax Service (SIE). In reality, the SIE will contact you directly, and you will only need to fill out Form 1447 to pay the business property tax (CFE). This amount is calculated based on the 751-SD questionnaire you receive after obtaining your SIRET number.
3.1 Fill Out Form 1447
Form 1447 is used to declare business property tax, and you will need to fill it out based on the information provided in the 751-SD questionnaire. This step is crucial to ensure that your LMNP activity is correctly recorded in the tax system.
3.2 Confirm the CFE Amount
The CFE amount is calculated based on your LMNP activity and declaration information. Correctly filling out and submitting the form can avoid any unnecessary tax issues.
FAQ
How do I obtain my SIRET number to create LMNP status?
If you derive income from furnished rentals, you need to fill out Form P0i within 15 days of the start of the lease. This is a mandatory step to declare your LMNP activity and register with the Business Formalities Center (CFE). Registration not only legalizes your activity but also allows you to obtain a SIRET number, which is essential for signing lease contracts. Applying for a SIRET number for LMNP is completely free.
How do I opt for the real regime?
If you wish to switch from the Micro-BIC regime to the real regime, you need to send a registered letter with acknowledgment of receipt to the Business Tax Service (SIE). This option is valid for one year and automatically renewable for the same period. After that, you need to send the option letter to the Commercial Court and attach financial statements when submitting the furnished rental income declaration.
While creating LMNP status requires completing several steps, each step is crucial to ensure that you operate legally and maximize tax benefits. By correctly filling out Form P0i, choosing the appropriate tax regime, and contacting the Business Tax Service (SIE), you can smoothly complete the registration for LMNP status and enjoy the many benefits of furnished rentals.
Micco hopes this guide provides clear steps and detailed information to help you become a qualified LMNP landlord.
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