Income tax - Rental investment in the former Law of Normandy (tax reduction)
Verified 15 June 2023 - Legal and Administrative Information Directorate (Prime Minister)
Additional cases ?
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:
- Municipalities with a high need for habitat rehabilitation
- Communes in labeled areas City center
- Municipalities having passed a Land Revitalization Operation Agreement (LRCA)
To find out if a city falls under this scheme, you can use this simulator:
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
Composition of the tax household | Area A bis | Zone A | Zone B1 | Zone B2 | Area C |
|---|---|---|---|---|---|
Single person | €41,855 | €41,855 | €34,115 | €30,704 | €30,704 |
Torque | €62,555 | €58,831 | €45,558 | €38,560 | €38,560 |
+ 1 dependent | €82,002 | €75,194 | €54,785 | €49,307 | €49,307 |
+ 2 dependants | €97,904 | €90,070 | €66,139 | €59,526 | €59,526 |
+ 3 dependants | €116,487 | €106,627 | €77,805 | €70,025 | €70,025 |
+ 4 dependants | €131,078 | €119,897 | €87,685 | €78,917 | €78,917 |
Surcharge per additional dependant | + €14,603 | + €13,369 | + €9,782 | + €8,801 | + €8,801 |
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 | €30,338 | €30,338 | €32,872 |
Torque | €40,516 | €40,516 | €43,896 |
+ 1 dependent | €48,722 | €48,722 | €52,788 |
+ 2 dependants | €58,818 | €58,818 | €63,727 |
+ 3 dependants | €69,192 | €69,192 | €74,966 |
+ 4 dependants | €77,978 | €77,978 | €84,485 |
Surcharge per additional dependant | + €8,704 | + €8,704 | + €9,429 |
You can check the area in which your investment is located with a simulator:
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
Location of the accommodation | Monthly rent ceilings per m² | |
|---|---|---|
2022 | 2023 | |
Area A bis | €17.62 | €18.25 |
Zone A | €13.09 | €13.57 |
Zone B1 | €10.55 | €10.93 |
Zone B2 (upon approval) | €9.17 | €9.50 |
Overseas
Location of the accommodation | Monthly rent ceilings per m² | |
|---|---|---|
2022 | 2023 | |
Guadeloupe | €10.74 | €11.19 |
Reunion | €10.74 | €11.19 |
Mayotte | €10.74 | €11.19 |
Guiana | €10.74 | €11.19 |
Martinique | €10.74 | €11.19 |
Saint Martin's Day | €10.74 | €11.19 |
Saint-Pierre and Miquelon | €10.74 | €11.19 |
French Polynesia | €12.87 | €13.56 |
New Caledonia | €12.87 | €13.56 |
Wallis and Futuna Islands | €12.87 | €13.56 |
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.
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:
- Explanatory notes
- Tax Return Brochure (indication of documents to be provided or retained)
Who can help me?
Find who can answer your questions in your region
For general information
Tax Information Service
By telephone:
0809 401 401
Monday to Friday from 8:30 am to 7 pm, excluding public holidays.
Free service + call price
To contact the local service managing your folder
Department in charge of taxes (treasury, tax department...)
- General Tax Code: Article 199vTax reduction scheme
- General Tax Code, Annex 3: Article 2k to 2sRent and resource ceilings
- General Tax Code, Annex 3: Article 46 AZA G to 46 AZA MTax reduction for rental investments
- Decree No. 2013-517 of 19 June 2013 on the reduction of rent ceilings and the approval of municipalities for tax aid for rental investment
- Decree n°2020-426 of 10 April 2020 on the conditions of application of the income tax reduction in respect of rental investment
- Order of 26 March 2019 on the list of municipalities qualifying for the tax reduction Denormandie
- Bofip-Taxes n°BOI-IR-RICI relating to tax reductions and credits
- Bofip-Taxes BOI-IR-RICI-365-20-20 relating to the old Denormandie scheme
- Bofip-Taxes n°BOI-BAREME-000017 relating to the rent and resource ceilings 2023 for rental real estate investment
- Check if your city falls under the "Denormandie" scheme
Simulator
- Pinel/Duflot device calculator
Simulator
- Know the area of his commune: A, Abis, B1, B2 or C
Simulator
- 2023 Simulator: 2022 Income Tax
Simulator
- Taxes: access your Special Space
Online service
- 2023 Online Income Tax Return 2022
Online service
- Income Tax Return (Paper)
Form
- 2023 Income Tax Return 2022 - Tax Reductions and Tax Credits
Form
FAQ
- Income tax: return and reportable incomeService-Public.fr
- Income tax: deductions, reductions and tax creditsService-Public.fr
- Buying or selling a homeService-Public.fr
- Land Revitalization Operation (ORT)National Agency for Territorial Cohesion (ANCT)
- Tax SiteMinistry of Finance
- Tax reduction for rental investment "Duflot"National Agency for Housing Information (Anil)
- Tax reduction for rental investment "Pinel"National Agency for Housing Information (Anil)
- 2023 Practice Brochure - 2022 Income Tax ReturnMinistry of Finance
- Complying with the 2020 SOS to build your homeEcological Transition Agency (Ademe)
- Municipalities qualifying for the tax reduction DenormandieLegifrance