Investing in rental property

04.13.2017

Parliament has introduced a succession of schemes that encourage private individuals to invest in the residential rental property market, which sometimes overlap.

Since 1 September 2014 the PINEL's scheme replaced the DUFLOT's scheme.

YOU WANT TO INVEST IN REAL ESTATE NEW?

  • The PINEL device 

    • It is open to persons who acquire before December 31, 2017 new or future housing completion.

    • Under certain conditions, it entitles the holder to a tax reduction equal to 12%, 18% or 21% of the cost price of the building, with a maximum limit of € 300,000 depending on whether the buyer undertakes to Rent its property for 6, 9 or 12 years.

    • Terms and conditions
      To qualify, the future owner must rent the property for at least 6 years, as the tenant's principal residence. He may be a descendant or an ascendant, provided that he is not part of his household.
      The tenant's resources and the amount of the rent must not exceed certain ceilings which depend on the geographical location of the dwelling.

    • Housing-related characteristics
      The property must respect an overall energy performance level according to the type of acquisition and be located in certain areas of the territory marked by a strong imbalance between supply and rental demand.

  • Censi-Bouvard device

    • It is intended for those who purchase new housing intended to be rented furnished before 31 December 2017.

    • The accommodation must be located in a residence for students or for elderly or handicapped persons.

    • The tax reduction is equal to 11% of the cost of housing. The amount of investments eligible for the tax reduction is retained up to € 300,000 per year, regardless of the number of homes acquired.

    • The property must be rented furnished and be the object of a commercial lease signed with the operator of the residence for a minimum duration of 9 years.

    • It is possible to benefit from the Censi-Bouvard scheme for housing completed for at least 15 years and having been rehabilitated.

OWNERS IN REAL ESTATE OLD, YOU WISH TO RENOVATE FOR RENT?

  • The Malraux device (allows owners of old buildings to benefit from very attractive tax benefits) 

    • Housing concerned:
      - Dwellings in bare areas to protect the architectural heritage, urban and landscape (ZPPAUP) and in conservation areas and use main residence of the tenant.

    • Location of accommodation:
      - Metropolitan France and overseas

    • Length of contract: 9 years

    • tax reduction attributable directly (ceiling of € 100,000 / year works during 4 years):
      - 30% of the restoration work for buildings sector saved
      - 22% of the work in protected areas of the architectural, urban and landscape (ZPPAUP).

    • Restrictions to the tenant: The tenant should not belong to the taxpayer of the lessor or be ascendant or descendant.

Namely

If you would like to have more information, do not hesitate to ask your own notaire who will be able to guide and advise you regarding the scheme that is most advantageous for you, in the light of your personal situation. You should also be aware that a lease drafted by a notaire offers security and the probative value and enforceability of an authentic instrument (which is of interest in the event of any problem with the tenant). Finally, your notaire will be able to handle the rental management of your assets during the term of the lease. Ask them about this.

See also
29.11.2016
The letter of the notaries of France in the world / November 2016
25.01.2017
French property market report / N°34