Income tax - Rental investment in the former Law of Normandy (tax reduction)
Verified 11 April 2024 - Directorate for Legal and Administrative Information (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. The investment is open until December 31, 2027. We'll tell you what you need to know.
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 2027.
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)
Please note
Since April 11, 2024, the tax reduction applies to dwellings in a condominium in difficulty placed under provisional administration or in a condominium included within the scope of a reclassification operation for degraded condominiums (ORCOD) declared or not to be of national interest.
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 | €43,475 | €43,475 | €35,435 | €31,892 | €31,892 |
Torque | €64,976 | €64,976 | €47,321 | €42,588 | €42,588 |
+ 1 dependent | €85,175 | €78,104 | €56,905 | €51,215 | €51,215 |
+ 2 dependants | €101,693 | €93,556 | €68,699 | €61,830 | €61,830 |
+ 3 dependants | €120,995 | €110,753 | €80,816 | €72,735 | €72,735 |
+ 4 dependants | €136,151 | €124,630 | €91,078 | €81,971 | €81,971 |
Surcharge per additional dependant | + €15,168 | + €13,886 | + €10,161 | + €9,142 | + €9,142 |
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 | €31,589 | €31,589 | €34,369 |
Torque | €42,186 | €42,186 | €45,896 |
+ 1 dependent | €50,731 | €50,731 | €55,192 |
+ 2 dependants | €61,243 | €61,243 | €66,630 |
+ 3 dependants | €72,044 | €72,044 | €78,380 |
+ 4 dependants | €81,192 | €81,192 | €88,333 |
Surcharge per additional dependant | + €9,063 | + €9,063 | + €9,859 |
You can check the area in which your investment is located with a simulator:
The dwelling must be rented naked (unfurnished) as main dwelling.
It must be rented at the latest 1 year after completion of the immovable 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 | |
|---|---|---|
2023 | 2024 | |
Area A bis | €18.25 | €18.89 |
Zone A | €13.57 | €14.03 |
Zone B1 | €10.93 | €11.31 |
Areas B2 and C (by approval) | €9.50 | €9.83 |
Overseas
Location of the accommodation | Monthly rent ceilings per m² | |
|---|---|---|
2023 | 2024 | |
Guadeloupe | €11.19 | €11.65 |
Reunion | €11.19 | €11.65 |
Mayotte | €11.19 | €11.65 |
Guiana | €11.19 | €11.65 |
Martinique | €11.19 | €11.65 |
Saint Martin's Day | €11.19 | €11.65 |
Saint-Pierre and Miquelon | €11.19 | €11.65 |
French Polynesia | €13.56 | €14.18 |
New Caledonia | €13.56 | €14.18 |
Wallis and Futuna Islands | €13.56 | €14.18 |
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?
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