In recent years, it has become increasingly simple to reduce your income tax thanks to various tax exemption strategies. These measures have been put in place above all to encourage rental property investment in both new and old buildings. A question arises all the same: which ones to choose among the various options available on the market? An overview is in order.
Thanks to the Pinel law, the investor will be able to benefit from an income tax reduction of 12, 18 and 21% (depending on the amount invested without exceeding €300,000 of investment per year) when the purchase of a new property, by committing to a lease of 6, 9 or 12 years.
With the 2019 finance bill, landlords in old housing can benefit from a derivative of the Pinel system, the Denormandie law. The big difference is that the latter only concerns degraded city centers. It is therefore not always easy to find properties compatible with the Denormandy Law. For example, finding goods accessible under the Pinel law in Nantes is rather easy; it is quite different for a property accessible under the Denormandy Law! We take the city of Nantes as an example because it is one of those cities that offer a wide range of incentive schemes for real estate investment. Old buildings and apartments can offer great opportunities for renovation, but it is more particularly new real estate that concentrates these investments. Planning the construction of student accommodation in Nantes is thus one of the projects on which the banks have already adopted a positive approach and real expertise.
The Pinel Law can also be applied to overseas real estate. But in this case, some changes will be expected: the tax advantage is, for example, greater (23, 29 or 32% depending on the rental period.
The Marlaux system also allows you to take advantage of a reduction in income tax in relation to expenses incurred on real estate in a protected area or a degraded area. The main objective of this law is to encourage the restoration of old buildings in historic town centres.
The tax reduction rates relate to 30% of expenditure for buildings in protected districts and 22% of expenditure in ZPPAUP zones (Zone for the Protection of Urban and Landscape Architectural Heritage). But there is an important condition: the reduction is conditional only on the rental of a property for a period of 9 years.
The LMNP or non-professional furnished rental is a device that allows an individual who rents his furnished property without the rental income being his main source of income from a tax reduction. This advantage also concerns non-professional furnished rental companies if they invest in tourist residences, student residences or accommodation premises for dependent elderly people.
For a new property, the investor will have the possibility of turning to the Censi Bouvard Law and benefiting from a tax reduction of 11% on the amount invested, for nine years.
This device is mainly intended to encourage owners of empty homes to open them up for rent. Thus, when the owner of said property signs an intermediation agreement, he opens up to the rental of his property to people with low incomes.
In return for this act, he will be able to benefit from a tax deduction which can reach 85% of his rental income.