Lois Scellier, Demessine, Malraux… the systems available to rental investors are so numerous that it is difficult to navigate. Small summary of the different offers on the market.
1- In the new: Scellier Law, Popular Borloo Law
Scellier law It gives the right to a 25% tax reduction spread over 9 years, instead of being based on depreciation, as is the case with the Robien and Borloo laws. For a "Scellier Plus" or also called a "Social Scellier" (subject to the tenant's lower resources), the tax reduction can continue for another 3 or 6 years. The price of the accommodation to which the reduction relates is limited to € 300,000. The savings will therefore be € 75,000 maximum. Rents are capped according to the geographic area where the property is located. All investors, whatever their resources, are entitled to it. The Scellier law is therefore less elitist than the Borloo and Robien laws, which are aimed at taxpayers with high incomes. Please note: the rate is set at 25% until 2010 but will drop to 20% in 2011 and 2012. The popular Borloo law Investors deduct 65% of the purchase price of housing over 15 years and benefit from an additional tax reduction of 30% on their gross property income. This system is interesting for people whose taxable income is more than € 30,000 per year. It is possible to buy without personal contribution. The property must be rented for 9 years. The tenant's income is capped as well as the rents, which are 30% lower than those of the private market. These goods can therefore be rented very easily.
2- In the new and the old: Refocused Robien Law
You can deduct from your income half the purchase price of the property for 9 years, 6% for 7 years then 4% for 2 years. The accommodation must be rented a minimum of 9 years. Tenants are not subject to income limits, unlike Borloo law, and you can even rent to a family member (parent or child). As for rents, they are capped according to the geographic area. This system applies to new housing but also to rehabilitated old housing. Like the Borloo law, the Robien law is aimed at investors whose taxable income exceeds € 30,000 annually.
3- In a tourist residence: Demessine law
The Demessine law makes it possible to reduce taxes by 25% of the purchase price of the accommodation and to recover VAT over 6 years. The property must be part of a tourist residence classified in a Rural Revitalization Zone (ZRR). The investor can enjoy the accommodation for up to 8 weeks per year. The bank can finance the entire project. Rents are guaranteed for the entire duration of the commercial lease, i.e. for 9 years, since it is rented to the operator of the tourist residence.
4- In the French overseas departments and territories: Girardin law
The Girardin law concerns new housing. The investor can live in the property if it is his main residence. He must then occupy it for a minimum of 5 years. He can also rent it as a main residence, for a minimum of 6 years. For a rental in an intermediate sector (capped rents), the tax reduction amounts to 50% of the cost of housing for 5 years. In a free sector, it is 40%, or 8% per year, capped at € 25,000 per year plus 10% of income. This device is intended for high-income investors, paying at least € 8,000 in taxes per year.
5- For a classified property or in a heritage protection zone: Malraux Law / Historic Monument
This law is aimed at taxpayers who are highly taxed and sensitive to heritage since it makes it possible to restore buildings classified in a protected sector or in a Zone for the Protection of Urban and Landscape Architectural Heritage (ZPPAUP). The tax benefits relate to the work carried out. Indeed, all work can be deducted from income. Loan interest is also deductible from property income, for 10 years. Once renovated, the accommodation must be rented naked as a main residence for 6 years. The tenant's rents and resources are not capped. Please note: This device intended for high-income investors wishing to have unlimited tax exemption should be capped and the conditions tightened.