The Constitutional Council made an important decision on the 8th February meaning that it is no longer mandatory to be registered with the RCS in order to hold a professional landlord of a furnished rental (LMP) status.
Before this decision was taken, the taxpayer had to meet three conditions in order to qualify as a professional landlord of a furnished rental:
- at least one member of the taxable household had to be registered with the Trade and Companies Register (RCS) as a professional landlord of a furnished rental;
- the annual revenue for this activity had to exceed €23,000;
- the revenue had to exceed the income from the taxable household’s activities.
In order to allow people to benefit from this professional landlord status, tax authorities allowed landlords whose registration had been refused to provide a copy of the court’s decision explaining the reasons for rejecting the claim, in place of their copy of registration with the RCS.
The Constitutional Council, in its decision on the 8th February, revoked the condition of registering with the RCS because it overlooked the principle of equality before public burdens. Only the conditions concerning revenues must be respected from now on.
Therefore, someone who is a private landlord of a furnished rental (LMNP) and who fulfils the two revenue conditions would automatically be considered as having the right to the professional title for the year 2018, whereas the private landlord status would perhaps be more interesting to them.
The ruling of unconstitutionality has led to the repeal of the provision of the General Tax Code. However, the commentary of the decision published on the Constitutional Council’s website suggests to the legislator changing the existing provisions “in order to make the occupation of professional landlord of a furnished rental dependant on one condition allowing the activity in question to become official” and eventually proposes to keep a criteria other than registering with the RCS in order to establish the professional nature of the activity.