To reduce its tax bill, there are legal tax exemption mechanisms implemented by the State. Several real estate systems make it possible to reduce its tax burden. Linternaute.com presents the main ones.
Why not try to reduce your tax bill? The twists and turns of tax regulations legally reduce the bill, in particular by using real estate tax exemption mechanisms. Tax exemption means “no longer subscribing to tax certain products or services, certain contributions”. Through tax incentives, the State is trying to “direct” the behavior of investors towards the housing policy it wishes to pursue.
What is property tax exemption?
Property tax exemption is a set of legal measures which allow an investor to buy a property with the aim of renting it out, but above all to benefit from tax breaks. Pinel, Girardin, Malraux law … Real estate tax exemption is multifaceted. Each device is specific, and it is advisable to study them well before launching.
It is the most widely known real estate tax exemption law. The Pinel law – named after the former Minister of Housing Sylvia Pinel – set up in 2015 (following the Duflot scheme) allows an investor to benefit from a tax reduction on the condition of renting their accommodation for a period of ” at least 6 years. The objective is to encourage the creation of new housing and the renovation of old housing. The tax reduction provided for by law cannot be calculated beyond the following ceilings: maximum 300,000 euros per person per year, and 5,500 euros per m2 of living space.
| Eligible goods | terms | duration | Tax benefit | Deadline for investing |
| New housing – Housing in future state of completion | Housing in a so-called “tense” area – rental in the tenant’s main residence – rent ceilings to be respected – resource ceilings not to be exceeded | 6 years minimum rental is necessary to benefit from the device | 12% for 6 years rental – 18% for 9 years rental – 21% for 12 years rental | December 31, 2021 – The Pinel law was originally scheduled to end in December 2017. |
The Malraux device which dates from 1962, the time of the former Minister of Culture of General de Gaulle, has been greatly reshaped since its creation. However, the spirit of the law has not changed. Objective: encourage the renovation of real estate that has a recognized historic character by granting a tax reduction. This measure is aimed at tax households with high incomes. Concretely, to benefit from the Malraux law, the property must be located within a specific geographical perimeter (which often corresponds to the historic center of cities). The renovation must also be validated by an architect from the Bâtiments de France.
| Eligible goods | terms | duration | Tax benefit | Deadline for investing |
| Rehabilitated old housing | Rental in the tenant’s main residence | 9 years minimum rental are necessary to benefit from the system | Tax reduction from 22 to 30%. | No limits |
The Girardin law is a device which dates from July 2003 and which aims to encourage investment in the overseas departments by granting a tax reduction to the buyer. The Girardin law is deployed in two parts: the financing of industrial equipment (Girardin industrial law) and investment in social housing (Girardin social law). In the industrial aspect, the tax reduction is not calculated on the amount of your investment but on the total amount of the equipment acquired for rental to an operator overseas. The social component aims to increase the rental of new housing to people on low incomes. The property must be leased six months after its acquisition.
| Eligible goods | terms | duration | Tax benefit | Deadline for investing |
| Industrial equipment – new social housing or in future state of completion | Overseas investment – rent ceilings to be respected for the rental of social housing – tenant resource ceilings not to be exceeded | 5 years minimum rental of industrial equipment – 5 years minimum rental of social housing | Up to 63% tax reduction (the Girardin is not subject to the global ceiling on tax loopholes of 10,000 euros). | December 31, 2020 for Guadeloupe, Guyana, Martinique, Mayotte, Réunion, Saint-Martin – December 31, 2025 for Saint-Pierre and Miquelon, New Caledonia, French Polynesia, Saint-Barthélémy, Wallis and Futuna |
The Censi-Bouvard law is a real estate tax exemption system that allows you to benefit from a tax reduction by investing in housing located in a service residence (student residences …) The tax reduction amounts to 11% of the amount of the investment and spans linearly over 9 years. The accommodation must be rented to a professional operator.
| Eligible goods | terms | duration | Tax benefit | Deadline for investing |
| Housing in furnished residences, new, under construction or rehabilitated with service (student residences, nursing homes, senior residences) | Ceiling of 300,000 euros (housing price) to calculate the tax reduction | 9 years minimum rental furnished to a professional operator | 11% of the amount of the investment in tax reduction | December 31, 2018 |