TLDR: The LMNP (Censi-Bouvard) scheme stands out due to the absence of mandatory zoning, the impossibility of combining it with overseas tax reductions for the same property, and a global tax reduction cap of €10,000 per taxpayer. Unlike other schemes such as Pinel or Scellier, it does not impose geographical constraints and offers greater flexibility.
No mandatory zoning
The LMNP scheme does not subject the investment to geographical zoning criteria, unlike schemes such as Pinel or Scellier, which limit eligibility to specific areas (e.g., zones A, B1, or municipalities with an imbalance between supply and demand). This lack of restriction allows investors to freely choose the location of their property.
Incompatibility with overseas tax reductions
A taxpayer cannot combine, for the same property, the LMNP tax reduction with those provided for rental investments made overseas (articles 199 undecies A and 199 undecies B of the French Tax Code). This rule prevents a double tax advantage on a single property.
Global tax reduction cap
All tax benefits related to LMNP, including the tax reduction provided for in article 199 sexvicies of the French Tax Code, are capped at €10,000 per taxpayer per year. This cap applies regardless of the number or value of investments made.
Comparison with other schemes
Schemes such as Pinel or Scellier impose additional constraints:
- Zoning: Obligation to locate the investment in eligible areas (e.g., high-demand zones).
- Cumulability: Possibility of combining with other schemes under conditions, but with specific restrictions (e.g., no combination with LMNP for overseas).
- Caps: Tax reduction caps vary depending on the scheme (e.g., €63,000 for Pinel over 9 years).
Flexibility and calculation basis
LMNP allows a calculation basis for the tax reduction limited to €300,000 per year, including the purchase price of the property, its dependencies, and rehabilitation work. This basis is global for the tax year, even in the case of purchasing multiple properties.
Exclusions and limits
The LMNP scheme excludes certain types of properties or situations:
- Properties not intended for non-professional furnished rental.
- Investments that do not comply with the conditions of rental or minimum duration.
- Combination with other tax advantages for the same property (e.g., overseas).