What’s new in the French 2023 Finance Law for real estate 

2 February 2023

French finance law 2023 for real estate : Abolition of the housing tax (taxe d’habitation) for principal residences.

The reform initiated in 2018 has come to an end. If the housing tax is maintained for secondary residences, it is definitely abolished for primary residences. 

Modification of the energy diagnosis. Homes the energy consumption of which exceeds 450 kWh/m2 per year will no longer be offered for rent. As a reminder, an energy performance diagnosis (DPE) is in principle mandatory for the sale of a building, the signing of a rental agreement, as well as for new constructions. 

French finance law 2023 : Point for rental investors

The Pinel scheme  has been renewed until 2024 but the tax exemption rates will decrease from April 1, 2023 as follows: 

Commitment  Tax Reduction 2022 Tax Reduction 2023 Tax reduction 2024
6 years 12% 10,5% 9%
9 years 18% 15% 12%
12 years 21% 17,5% 14%

Pinel Plus allows the 2022 rates to be retained under one additional among two alternative conditions (the main conditions do not change). The first is related to the geographical location of the building: to be located in a priority district of the city policy. The second is linked to the high quality level of energy performance, use and comfort defined by decree. Example: a minimum surface area per type of housing: 45 m² for a two-room flat. 

The Cosse deduction is extended until 2024

Four conditions are required: the property must be rented out empty, as the tenant’s main residence, within the same resource and rent ceilings as for the Pinel scheme, and for a period of 6 or 9 years. If the property is rented out as part of a rental intermediation scheme, it is eligible for an 85% tax reduction. 

The Malraux tax reduction is maintained

It is a maximum of 30% on the restoration expenses incurred, up to a limit of €100,000, provided that the property is located in : 

  • An old degraded district (QAC); 
  • A neighborhood with a significant amount of deteriorated old housing that falls within the scope of a multi-year agreement as part of the NPNRU. 

The Denormandie scheme

Landlords of housing located in a municipality in the national Action cœur de ville program (conditions related to the rent, the work carried out and the characteristics of the housing to be renovated) must carry out work on the property representing at least 25% of the total price of the operation (acquisition + work), up to a ceiling of €300,000. The tax advantage depends on the duration of the rental: 

  • 6 years: the tax reduction is 12% ; 
  • 9 years: the tax reduction is 18%; 
  • 12 years: the tax reduction is 21%. 

Example: if the property is purchased for €225,000 and the eligible work amounts to €75,000, for a 12-year rental period, the tax benefit is €63,000 (21% of €225,000 + €75,000 = €300,000), i.e. €5,250 of tax reduction per year (over 12 years). 

The end of the Censi Bouvard scheme

It officially ended on December 31, 2022. 

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