TLDR: You may fall under the micro-foncier regime if your total gross property income does not exceed €15,000 and you do not own assets or shares subject to certain exclusions. Special rules apply in particular to partners in real estate companies and holders of FPI units.
General conditions
The micro-foncier regime applies to direct or indirect property income taxable under the property income category. Your household’s total gross property income must not exceed €15,000 for the relevant tax year.
However, you cannot use this regime if you rent out assets benefiting from certain special tax regimes. The list of these exclusions depends on the categories provided for by law and must not be extended to all special schemes.
Partners in companies and holders of FPI units
You may fall under the micro-foncier regime as an individual partner of a transparent company covered by Article 1655 ter of the CGI, notably a co-ownership real estate company or an allocation company, if you directly rent out the property unfurnished.
The regime may also apply to an individual partner of a company whose results are taxed under Article 8 of the CGI, when that company rents out unfurnished properties and is not subject to corporate income tax because of its legal form, activity or an election. You must also own at least one property rented out unfurnished.
Holders of real estate investment fund (FPI) units may also be concerned. When your only property income comes from FPI units that do not benefit from special regimes, you may directly report your share of net income on tax return no. 2042.
Assets and schemes that may exclude the regime
The micro-foncier regime does not apply when you, or a member of your tax household, own certain assets or shares covered in particular by special regimes concerning:
- certain historic monuments and similar assets;
- certain residential properties benefiting from specific deductions or depreciation provided for by tax legislation;
- certain shares in companies holding assets subject to an excluded regime;
- the “Robien SCPI” and “Borloo SCPI” depreciation schemes;
- certain residential properties benefiting from the “Loc’Avantages” scheme.
These exclusions apply during the period in which the benefit of the derogatory scheme or specific deduction is claimed. The available extracts do not make it possible to establish an exhaustive list of all the regimes concerned.
Conversely, benefiting from the “Scellier”, “Duflot”, “Pinel”, “Denormandie” or “Malraux” tax reductions does not, by itself, prevent the application of the micro-foncier regime. However, certain specific deductions related to rentals in the intermediate sector or in rural revitalisation areas do not apply when net property income is determined under this regime.
Reporting and calculation of income
You report your gross property income on the overall tax return no. 2042. You are exempt from filing the supplementary property income tax return no. 2044.
Taxable net property income is calculated automatically after applying a flat-rate allowance of 30% representing expenses. You therefore cannot deduct your actual expenses separately under the micro-foncier regime.
Leaving the regime and prior deficits
The micro-foncier regime and the actual-expenses regime are mutually exclusive. You may opt for the actual-expenses regime within the deadline provided for filing tax return no. 2042 for the relevant year.
The actual-expenses regime becomes applicable automatically if an exclusion cause arises or if your receipts exceed €15,000. Filing tax return no. 2044 at a later date is not necessarily sufficient, in itself, to establish a new election for the actual-expenses regime.
The micro-foncier regime does not allow new property income deficits to be recorded. However, property income deficits recorded before the first year in which the micro-foncier regime applies and still available for carry-forward may continue to be offset under the ordinary rules against property income for the following ten years.