Micro-foncier or actual expenses: from what level of costs?

Under the réel regime, rents are reduced by loan interest and loan insurance, property tax (without the refuse tax recharged to the tenant), the landlord’s insurance, upkeep and repair work, co-ownership charges the tenant does not repay, and management fees.

In these examples, it is the interest that tips the balance. Without a loan, only the year of repairs exceeds 30%. With a recent loan, interest alone can be enough; it then falls every year.

Micro-foncier stops at €15,000 of gross rents for the whole household, all unfurnished lettings together. Above that, the réel regime applies.

The option for réel lasts three years and cannot be reversed during that time. It is taken by filing form 2044 with the income tax return. A single year of repairs therefore also commits the next two years, even without repairs.

After three years the option does not end by itself: the law keeps it valid as long as rents stay under the micro-foncier ceiling.

That is a rental deficit. The part that comes from costs other than interest is deducted from total income, up to €10,700 a year. The rest, and the part due to interest, is carried forward against rental income for the next ten years. In the repairs example, €6,100 goes against total income.

The limit rises to €21,400 for work that takes a home from E, F or G to A, B, C or D, to be proven by 31 December 2027 at the latest.

One condition comes with the deficit: keep letting. If the letting stops before the end of the third following year, the tax office recalculates the three previous years as if the deficit had not reduced total income. Only second- or third-category disability, dismissal or a death in the household are exceptions.