Investment to rent: towards tax relief for landlords? – Finances and inheritance

Rental properties have been at their worst for several years. The 119th Annual Convention of Notaries was thus an opportunity for a discussion regarding taxation of owners. Many proposals have therefore been put forward to regain the attractiveness of the sector.

Rental properties are trying to catch on

Homeowners are the first victims of this housing crisis. They didn’t do well for a long time profits from the rental of their property. Therefore, investors ask themselves a lot of questions whether it is better to delay or even cancel acquisition plans in the face of housing market tensions.

Here is several factors that are responsible for the current situation, especially the crisis in the real estate sector, property tax increases, rent control measures and even energy renovation obligations.

During the 119th Congress held in Deauville on 27, 28 and 29 September 2023, notaries focused on very forced aspect of rental investment and low profitability. In this context, several proposals from notaries have appeared, the aim of which is give new impetus to donors. Some of these measures could thus be incorporated into the Finance Act for 2024.

Drafts of notaries

This last convention was the most opportune time for notaries to issue several provisions that could make this possible breathe new life into rental investments to be attractive again despite the current situation.

Restrictions on taxation of rent

Remember that there are several taxes that govern rent, namely social security contributions and income tax. Of course, notaries believe that these obligations heavily penalize the landlord. Therefore, they proposed setting a ceiling for these levies with the aim of reduce the tax burden and at the same time support investment in real estate rental.

Eliminate IFI on rental properties

Property tax applies to all real estate with a net tax value of less than 1.3 million euros. Notaries have therefore proposed that this tax be abolished for properties that are rented out. He also supports this measurereducing the tax burden while stimulating investment.

Extension of tax measures to all regimes

Currently, the costs associated with energy renovation work can be deducted from the total income of French people who own old properties rented out bare. The proposal of notaries is therefore aimed at extend this provision to other properties which have not yet been affected, i.e. those furnished, new and even VEFA.

End the bare and furnished rental categories

These Different types of leases are subject to different tax obligations. The first mode is saved as land revenue and the other as BIC or commercial industrial profits. Notaries therefore wish to introduce a uniform statute for all owners.

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