How is rental income taxed in France — micro-foncier vs régime réel?

Rental income from unfurnished properties in France is called revenus fonciers and is taxed as ordinary income under the progressive barème, plus 17.2% social charges. Two regimes apply depending on the amount of rental income.

The micro-foncier regime is available if gross rental income is below €15,000 per year. Under this regime, a flat 30% abatement is automatically applied, and you are taxed on only 70% of gross receipts. No actual expenses need to be documented. This is simple but may not be optimal if real expenses are higher than 30%.

The régime réel applies automatically if rental income exceeds €15,000, or can be chosen voluntarily below that threshold. Under régime réel, you deduct actual allowable expenses: mortgage interest, property management fees, insurance, repairs, and local taxes (taxe foncière). If deductible expenses exceed income, the deficit (déficit foncier) of up to €10,700 can be offset against other income in the same year; the balance carries forward for ten years.

Furnished rentals (locations meublées) are taxed differently as BIC (industrial and commercial profits) rather than as revenus fonciers. They have their own micro regime (micro-BIC) with a 50% abatement and a higher threshold of €77,700 for 2024.