The property owners that rent their empty or bare properties, that is not furnished, must report their income in the land income category (in opposition to the furnished rental incomes that belong to the industrial and commercial profits – BIC category).
It is essential to differentiate in the land income category the micro-property tax regime that provides a lump-sum allowance of 30 % from the actual tax regime that allows to deduce charges for their real and justified amount, as well as to know that you can pass from tax regime to another under certain circumstances.

Land income: what is it?

Land incomes are generated by the rental of constructed or not buildings, consisting in regard with the tax lax as a civil activity. This is the case of rentals of empty properties, that is non furnished, and of its dependencies, garage, parking lots, commercial premises, shops, lands, but also houseboats and docked in a fix location.
Earnings generated by these rentals are charged in the category of land incomes and are under income taxation.

How to chose your land income tax regime: micro-land income or real

Two tax regimes are possible to report your empty rental income: the micro-land income or the actual regime.

The micro land income tax regime

If the land incomes of the taxable household are of or inferior to € 15 000, the regime by default will the micro-land income. In this case a lump-sum allowance of 30 % is made on the entire land income received during the year.
What are the report formalities?
It is very simple since you only have report the totality of your land income (rents without charges) on the income tax report form 2042. The tax administration applies a lump-sum allowance of 30 %, and the property owner and lessor has his rental income charged on 70 % of its tax bracket.

The actual land income tax regime

If the land incomes of the taxable household are superior to € 15 000, the tax regime is necessarily the actual regime. In this case it is possible to deduce from the cashed rents:

  • Maintenance, reparation expenses
  • Co property charges
  • Paid expenses for the tenants but still not paid by the latter
  • Management fees
  • Insurance primes
  • Real estate tax
  • Loans interests

What are the report formalities?
To report under the actual tax regime, the lessor must fill in the 2044 (cerfa 10334) form.

How to pass from the micro land income to the actual tax regime?

Property owners receiving less than € 15 000 and whose deductible expenses are superior to 30 % of their land incomes should rather adopt the actual tax regime. In order to do so, you will only have to send the 2044 form to the tax administration. This report will be considered as a cancellation of the option for micro- land income tax regime. Be careful, this option will be irreversible for three years.

If the properties are furnished, the generated income will be under the industrial and commercial profit tax category.

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About me

Maud Velter
Maud Velter
Legal & practical advice for furnished rentals
Associate and Legal Director of Lodgis, furnished rentals and property law specialist