In this article, you will find answers to the following questions:
Not all tax regimes require the same level of accounting. Some regimes have a higher level of complexity, requiring stricter bookkeeping. This means investors must pay closer attention to their financial records. Qlower simplifies this process by summarizing the accounting and tax obligations for individual property ownership (excluding SCI) under the standard rental income regime.
This regime allows for a 30% flat-rate deduction on rent received (excluding charges). The remaining amount is taxed under personal income tax (Impôt sur le Revenu – IR) at your marginal tax rate (TMI), plus 17.2% social security contributions.
To qualify:
The micro-foncier regime is very simple since you only need to declare your rental income on Cerfa Form No. 2042. The tax authorities will then apply the automatic 30% deduction to your declared rental income.
✅ Qlower Advantage: Qlower automates your accounting through Open Banking. With this regime, you can download your pre-filled tax declaration document in just a few clicks while benefiting from property management services.
This regime allows you to deduct a wide range of expenses (see Article 31 of the French General Tax Code).
Additionally, if deductible expenses (excluding loan interest) exceed rental income, you can create a tax deficit that can:
Similar to the micro-foncier regime, any remaining taxable income is subject to personal income tax (IR) at your marginal tax rate (TMI), plus 17.2% social security contributions.
You are automatically subject to the real property income regime if your annual rental income exceeds €15,000. Below this threshold, you can still opt for the real regime by filing a declaration (Cerfa Form No. 2044).
✅ Accounting Requirements: The real regime requires a cash-based accounting system, meaning all income and expenses must be recorded as they are received or paid.
Now that you understand both tax regimes, you can determine which is most beneficial for your situation by following these steps:
1️⃣ Calculate your total deductible expenses (condominium fees, management fees, insurance, loan interest, etc.).
2️⃣ Compare this amount to your rental income (excluding charges).
3️⃣ If your expenses exceed 30% of rental income, opting for the real regime is financially advantageous.
4️⃣ If your expenses are below 30% of rental income, choosing the micro-foncier regime is preferable.
⚠️ Warning: Your choice commits you for at least three years, so anticipate future expenses that might exceed the 30% threshold before making your decision.
💡 If you expect significant expenses in the next three years (e.g., renovation work), do not choose the micro-foncier regime, as it will limit your ability to deduct future costs.
Qlower advises and supports you throughout the planning, execution, and monitoring of your rental investment.
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