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Denormandie Law: tax reduction for rental investment in the former

Verified 09 avril 2021 - Legal and Administrative Information Directorate (Prime Minister)

The Denormandie facility allows you to benefit from a tax reduction if you make a rental investment in a degraded old neighbourhood. This accommodation must be located in certain communes.

Types of acquisitions

The tax credit applies to the following units:

  • Old housing being upgraded
  • Local converted into residential use

The work must represent at least 25% the total cost of the operation.

Investment period

The tax reduction applies to transactions between March 28, 2019 and December 31, 2022.

Location

The accommodation must be located in the  following:

To find out if a city falls under this device, you can use this simulator:

Check if your city falls under the "Denormandie" device

Directorate of Legal and Administrative Information (Dila) - Prime Minister

Nature of work

You must do one of the following work in the accommodation:

  • Work to improve energy performance of the housing 20% at least30% at least for individual accommodation)
  • At least 2 types of work among the change of boiler, the insulation of the attic, the insulation of the walls, the change of production of hot water, the insulation of the windows
  • Creation of new living space (e.g. balcony, terrace or garage)

  Warning : the work must be carried out by a certified professional Recognised as a guarantor for the environment (GR).

Find an RGE professional or an architect

Ecological Transition Agency (Ademe)

The work must be completed by 31 December of the 2e year after acquisition.

The tenant should not belong to your tax centre.

Sound reference tax income shall not exceed the regulatory ceilings.

Metropole

Maximum Annual Resources (2019 Tax Reference Income) by Geographic Area - Lease entered into in 2021 - Metropolitan

Composition of the tax centre

Area A

Area A

Area B1

Area B2

Area C

Single

€38,377

€38,377

€31,280

€28,152

€28,152

Couple

€57,357

€57,357

€41,772

€37,594

€37,594

+ 1 dependant

€75,188

€68,946

€50,233

€45,210

€45,210

+ 2 dependants

€89,769

€82,586

€60,643

€54,579

€54,579

+ 3 dependants

€106,807

€97,766

€71,340

€64,206

€64,206

+ 4 dependants

€120,186

€110,017

€80,399

€72,359

€72,359

Increase per additional dependant

+ €13,390

+ €12,258

+ €8,969

+ €8,070

+ €8,070

Overseas

Maximum Annual Resources (2019 Tax Reference Income) by Geographic Area - Lease Completed in 2021 - Overseas

Composition of the tax centre

Department of Overseas (Dom)

Saint Martin

Saint Pierre and Miquelon

French Polynesia

New Caledonia

Wallis and Futuna

Single

€28,606

€28,606

€31,099

Couple

€38,202

€38,202

€41,528

+ 1 dependant

€45,941

€45,941

€49,941

+ 2 dependants

€55,461

€55,461

€60,290

+ 3 dependants

€65,241

€65,241

€70,923

+ 4 dependants

€73,527

€73,527

€79,928

Increase per additional dependant

+ €8,206

+ €8,206

+ €8,920

The accommodation must be rented as main dwelling.

It must be leased no later than 1 year after the completion of the building or after its acquisition.

The lease term must be 6, 9 or 12 years.

The monthly rent shall not exceed, excluding charges, the following ceilings:

Metropole

Monthly rent ceilings, per m², charges not included, for leases concluded in mainland France

Location

Monthly rent ceilings per m²

2020

2021

Area A

€17.43

€17.55

Area A

€12.95

€13.04

Area B1

€10.44

€10.44

Area B2 (on approval)

€9.07

€9.13

Overseas

Monthly rent ceilings, per m², charges not included, for leases concluded in mainland France

Location

Monthly rent ceilings per m²

2020

2021

Guadeloupe

€10.48 €

€10.55

Meeting

€10.48 €

€10.55 €

Mayotte

€10.48 €

€10.55 €

Guyana

€10.48 €

€10.55 €

Martinique

€10.48 €

€10.55 €

Saint Martin

€10.48 €

€10.55 €

Saint-Pierre and Miquelon

€10.48 €

€10.55 €

French Polynesia

€12.81 €

€12.83 €

New Caledonia

€12.81 €

€12.83 €

Wallis and Futuna Islands

€12.81

€12.83 €

The rent ceilings vary according to the surface of the dwelling by application of multiplier .

The ceilings may be reduced to reflect the particularities of local rental markets.

Ceiling

The tax reduction shall be calculated taking into account the following:

  • Cost of acquisition of housing capped at €300 000
  • Ceiling €5,500 per m² of living space.

You must also consider the overall cap on tax benefits.

Tax Reduction Rate

The rate varies depending on the duration of the lease.

Rate of tax reduction based on lease term

Lease commitment time

Tax reduction

6 years

12% the price of the property

9 years

18% the price of the property

12 years

21% the price of the property

  FYI : the rules are different overseas.