Does the déficit foncier get offset against all of my income?

The share of the deficit from charges other than loan interest is offset against your overall income, but only up to €10,700 per year. Beyond that, the excess — like the share tied to loan interest — is carried forward against your revenus fonciers for the following ten years.

Can I create a déficit foncier by letting furnished?

No. Furnished lettings fall under BIC (bénéfices industriels et commerciaux), not revenus fonciers: they do not generate a déficit foncier. Déficit foncier is reserved for unfurnished lettings under the régime réel.

What happens if I sell or stop letting after offsetting a deficit?

To keep the benefit of offsetting against overall income, the property must remain let until 31 December of the third year following the one in which the deficit was offset. Selling or ending the letting before that date can lead the tax authorities to claw back the tax benefit.

Déficit foncier (rental-income deficit): offsetting, the €10,700 cap and carry-forward

Updated on August 24, 2026 · 7 min read

When the charges on an unfurnished let exceed the rent collected, a landlord under the régime réel (actual-expenses regime) generates a déficit foncier (rental-income deficit). Used well — especially during major works — it is one of the most powerful tax levers available to a landlord: it can reduce not only your revenus fonciers (rental income) but also your overall taxable income. Here is how it works, within what limits, and the conditions you must not miss.

What a déficit foncier is

A déficit foncier arises when the deductible charges on an unfurnished let (works, taxe foncière, insurance, loan interest, management fees…) exceed the rent received during the year.

It only applies to unfurnished lettings, taxed under revenus fonciers, and only under the régime réel: the micro-foncier regime, with its flat 30% allowance, never allows a deficit to be recorded. Furnished lettings, taxed under BIC (bénéfices industriels et commerciaux), follow different rules and do not generate a déficit foncier.

The €10,700 offsetting cap

The whole appeal of déficit foncier lies in offsetting it against your overall income. The share of the deficit that comes from charges other than loan interest is offset against your overall taxable income, up to a limit of €10,700 per year. This is what reduces your tax beyond the rent alone.

The share of the deficit stemming from loan interest, on the other hand, is only offset against your revenus fonciers — not against overall income. Finally, the portion of the deficit that exceeds the €10,700 cap is not lost: it can be carried forward against your revenus fonciers for the following ten years.

The case of energy-renovation works

To encourage owners to bring passoires thermiques (poorly insulated homes) up to standard, a temporary scheme doubled the offsetting cap to €21,400 when the deficit results from energy-renovation works that move a home from energy class E, F or G to class A, B, C or D.

This higher cap applied to spending paid up to 31 December 2025, on an accepted quote with a deposit paid from 2023 onward. Beyond that deadline, the standard €10,700 cap applies again: check the payment date of your works to know which cap applies to your tax return.

Conditions and pitfalls to avoid

The benefit of offsetting against overall income is not permanently acquired: it is conditional on the letting continuing.

the property must remain let (unfurnished) until 31 December of the third year following the year the deficit was offset; otherwise, the tax authorities can claw back the benefit;
only maintenance, repair and improvement works are deductible — construction, reconstruction or extension works are not, and do not create a deficit;
keep every invoice and supporting document: works deducted under the régime réel cannot be counted a second time, for example when calculating a future capital gain.

How to declare it

The deficit is calculated on formulaire 2044 (or the special 2044), where you detail rent and charges property by property. The result is then carried over to your main tax return (formulaire 2042): the share offsettable against overall income and, where applicable, any earlier deficits still available for carry-forward are entered in separate boxes.

In an SCI (non-trading property company) subject to income tax, the mechanism is the same: each shareholder offsets their share of the deficit under the same rules. Keeping rental accounts throughout the year — rent collected, works invoices, loan repayment schedules — makes the tax return far simpler and secures your supporting documents in case of an audit.

Frequently asked questions

Does the déficit foncier get offset against all of my income?: The share of the deficit from charges other than loan interest is offset against your overall income, but only up to €10,700 per year. Beyond that, the excess — like the share tied to loan interest — is carried forward against your revenus fonciers for the following ten years.
Can I create a déficit foncier by letting furnished?: No. Furnished lettings fall under BIC (bénéfices industriels et commerciaux), not revenus fonciers: they do not generate a déficit foncier. Déficit foncier is reserved for unfurnished lettings under the régime réel.
What happens if I sell or stop letting after offsetting a deficit?: To keep the benefit of offsetting against overall income, the property must remain let until 31 December of the third year following the one in which the deficit was offset. Selling or ending the letting before that date can lead the tax authorities to claw back the tax benefit.