1/ LMNP or Loueur en Meublé Non Professionnel

There are two different tax statuses applied to leaseback:

LMNP, Loueur en Meublé Non Professionnel (non professional lessor of furnished accommodation) and
LMP, Loueur en Meublé Professionnel (professional lessor of furnished accommodation).

These terms have been translated into English as " Leaseback "

Both of these statuses present numerous advantages for the tax-payer because they allow the owners of a property purchased under this scheme to offset all their property-related expenses against their rental income: namely transaction costs (notary fees), mortgage interest, accountant's fee and land tax (taxe foncière) as well as a certain value of the property and the furnishings every year for depreciation. This allows for considerable tax savings.

LMNP status will let you offset all the expenses against the rental income from the property. This status applies to most individual foreign investors.

LMP status (to achieve this you must earn over 23 000 euros or more than half of your total income from this activity) confers even greater advantages, which are of interest to French residents paying income tax in France on income from other sources, such as salaries or other investments; in these circumstances you can offset your expenses against your overall income, whatever its provenance, and it is easy to see why this status is one of the most desirable for individuals in France - you can effectively pay substantially less income tax while building a property portfolio. This status will not apply to a foreign investor if he/she is not a French resident.

Both these statuses have remained unchanged by the recent modifications in French tax laws made by the Sarkozy government in 2007.