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Income tax - Rental investment in the former Law of Normandy (tax reduction)

Verified 21 March 2023 - Directorate for Legal and Administrative Information (Prime Minister)

Additional cases ?

Pinel and Duflot devices

The Denormandie scheme allows you to benefit from a tax reduction if you make a rental investment in a degraded old neighborhood. This housing must be located in certain municipalities.

Types of acquisitions

The tax reduction relates to the following housing units:

  • Old housing being improved
  • Premises converted into residential use

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

Investment Period

The tax reduction relates to the transactions carried out between 28 march 2019 and 31 december 2025.

Location of the accommodation

The accommodation must be located in the following municipalities:

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

Check if your city falls under the "Denormandie" scheme

Nature of the work to be carried out

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

  • Work to improve the energy performance of the housing of 20% at least (30% at least for individual accommodation)
  • At least 2 types of work among boiler change, attic insulation, wall insulation, hot water production change, window insulation
  • New living space creation (e.g. balcony, terrace or garage)

Please note

for work to improve the energy performance of the dwelling, the use of a certified professional Recognized guarantor for the environment (EGR) is recommended.

Find an EGR professional or architect

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

The tenant must not belong to your tax shelter.

Sound reference tax income shall not exceed the following limits:

Metropolis
Tableau - Maximum annual resources (2020 benchmark tax income) by geographic area - Lease concluded in 2022 - Metropolis

Composition of the tax household

Area A bis

Zone A

Zone B1

Zone B2

Area C

Single person

€39,363

€39,363

€32,084

€28,876

€28,876

Torque

€58,831

€58,831

€42,846

€38,560

€38,560

+ 1 dependent

€77,120

€70,718

€51,524

€46,372

€46,372

+ 2 dependants

€92,076

€84,708

€62,202

€55,982

€55,982

+ 3 dependants

€109,552

€100,279

€73,173

€65,856

€65,856

+ 4 dependants

€123,275

€112,844

€82,465

€74,219

€74,219

Surcharge per additional dependant

+ €13,734

+ €12,573

+ €9,200

+ €8,277

+ €8,277

Overseas
Tableau - Maximum annual resources (2020 benchmark tax income) by geographic area - Lease concluded in 2022 - Overseas

Composition of the tax household

Overseas Department (Dom)

Saint Martin's Day

Saint Pierre and Miquelon

French Polynesia

New Caledonia

Wallis and Futuna Islands

Single person

€29,079

€29,079

€31,199

Torque

€38,834

€38,834

€41,662

+ 1 dependent

€46,700

€46,700

€50,101

+ 2 dependants

€56,377

€56,377

€60,484

+ 3 dependants

€66,320

€66,320

€71,151

+ 4 dependants

€74,742

€74,742

€80,185

Surcharge per additional dependant

+ €8,342

+ €8,342

+ €8,949

You can check the area in which your investment is located with a simulator:

Know the area of his commune: A, Abis, B1, B2 or C

The accommodation must be rented naked (unfurnished) as main dwelling.

It must be rented at the latest 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:

Metropolis
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2021

2022

Area A bis

€17.55

€17.62

Zone A

€13.04

€13.09

Zone B1

€10.51

€10.55

Zone B2 (upon approval)

€9.13

€9.17

Overseas
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2021

2022

Guadeloupe

€10.55

€10.74

Reunion

€10.55

€10.74

Mayotte

€10.55

€10.74

Guiana

€10.55

€10.74

Martinique

€10.55

€10.74

Saint Martin's Day

€10.55

€10.74

Saint-Pierre and Miquelon

€10.55

€10.74

French Polynesia

€12.83

€12.87

New Caledonia

€12.83

€12.87

Wallis and Futuna Islands

€12.83

€12.87

Rent ceilings vary depending on the size of the dwelling application of a multiplier.

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

Ceiling

The tax reduction is calculated by taking into account the following:

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

You must also consider the overall cap on tax benefits.

Rate of tax reduction

The rate varies according to the duration of the lease commitment.

Tableau - Rate of tax reduction based on the duration of the lease commitment

Lease Commitment Duration

Tax reduction

6 years

12% of the price of the property

9 years

18% of the price of the property

12 years

21% of the price of the property

FYI  

the rules are different overseas.

To fill your tax return, you can view the following documents:

Tenant Resource Limit and Rent Limit in 2023

Published on 1 January 2023

The applicable rent caps for a 2023 rental investment and for the Affordable Rent Facility are not yet known.

The 2023 resource ceilings for an intermediate rent agreement are not yet known.

This page will be updated when these amounts are published.

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