If you are not a fan of financial investments, or wish to supplement your investments, we advise you to turn to real estate. Wondering how to reduce your taxes through real estate investments ? We have the answer ! Several devices exist, concerning real estate of different nature. Here’s everything there is to know about each of them.
1.Malraux: investing in old real estate
Concept: The Malraux law system aims to protect French architectural heritage . This is why you are eligible if you carry out restoration work in an old dwelling of your own. And this, in order to rent it out. You will then be able to benefit from an advantageous tax regime .
2. Historical monuments: combining passion and taxation
Concept: The Historic Monuments Act is a law that is over 100 years old. Established in 1913, it promotes the restoration and preservation of the historical and real estate heritage of France. It is aimed more at French taxpayers who are heavily taxed. That is to say, to those who pay more than €30,000 in taxes per year .
Indeed, you can reduce your taxable income if the amount of your work is greater than your property income. The deficit generated will thus be allocated to their overall income, without any ceiling!
To know: There are some constraints to be aware of, however. First of all, the location of the goods can be a problem when renting. Indeed, the properties can be located outside the city center, and represent a brake for potential tenants. In addition, properties classified as historical monuments are rare, which adds to the difficulty of investing in this system. To be sure of taking the right steps, we advise you to call on an expert who will be able to inform you about the best investments available on the market.
Concept: An individual owner of furnished real estate can rent them out and have the status of non-professional furnished property lessor ( LMNP ). This status has many advantages, especially from a tax point of view.
Profit: In LMNP the rents collected are subject to tax on industrial and commercial profits ( BIC ). Also, there are two regimes for furnished rentals: the Micro-bic regime and the real regime .
In order to better understand the eligible sectors and to better define the other variables of the project, we advise you to contact an expert in the sector.
Benefit: In exchange for a commitment to carry out work and rent the property for a minimum of 6 years, you can benefit from a tax reduction . This varies according to the duration of the rental of the property:
To know: In order to take advantage of the tax advantages, real estate acquisitions must be made before December 31, 2023, the end date of the system.
How to reduce your taxes by investing in the DOM-TOM?
Here is the table corresponding to the tax deduction rate of the Pinel Outre-mer law, as well as the comparison with the rates practiced in mainland France:
Investing in a FIP overseas or in Corsica is also more tax-efficient than investing in a FIP in mainland France. The rate of reduction of income tax in this case amounts to 30% against 25% in mainland France.
Operation: The Pinel Overseas law is based on the same foundation as the Pinel law. It is therefore an investment in new or renovated real estate in order to rent it out as the main residence of the tenant. Investment in the Pinel Overseas Law is subject to the same conditions as those of the Pinel Law. The differences between these two systems lie in the place of location of the accommodation, in this case the DOM-TOMs, and the rate of tax reduction.