Calculating Taxable Rental Income in France: Allowable Deductions

The General Principle and the Art. 31 List

Under the real income regime (CGI Art. 28), taxable revenus fonciers equal the difference between gross receipts received and the total of charges actually paid, determined each year. The general principle underpinning deductibility is CGI Art. 13: expenditure incurred with a view to acquiring or conserving income is deductible. However, CGI Art. 31 provides the specific statutory list of deductible charges for revenus fonciers, and where a charge is expressly excluded by Art. 31, the landlord cannot fall back on the Art. 13 general principle to deduct it (CE (na) 30-12-2010 n° 335628). The Art. 31 list is not exhaustive — certain charges deductible under Art. 13 but not expressly listed can still be deducted (eviction indemnities, commissioning costs). However, any charge expressly excluded cannot be admitted by reference to Art. 13.

Management and Administrative Fees

The following are deductible at their actual amount (CGI Art. 31, I-1°-e):

• Remuneration of concierges or guardians (salaries, benefits in kind, social and fiscal charges);
• Management fees paid to property managers (gérants d’immeubles) or property administrators (administrateurs de biens), letting agency commissions, accountant and tax return preparation fees;
• Legal and procedural costs, including litigation proceedings and formal notices against tenants or contractors.

Other general administrative costs (correspondence, telephone, advertising, etc.) are covered by a flat allowance of €20 per property and are not deductible in excess of that amount.

Works: The Three-Way Distinction

Works are the most consequential and contested area of revenus fonciers deductions. Three categories must be clearly distinguished.

Repair and Maintenance Works: Deductible for All Properties

Repair and maintenance works are deductible for all types of property — residential and commercial alike (CGI Art. 31, I-1°-a). These are works designed to keep or restore the building to good condition and allow normal use, without changing its structure, layout, or original equipment. Examples: restoration of main structural elements (roofs, facades, boundary walls), pipework, electrical installations, boiler replacement, radiator elements.

Improvement Works: Deductible Only for Residential Properties

Improvement works are deductible only for residential premises (CGI Art. 31, I-1°-b and b bis). These are works bringing a new item of comfort equipment or a new element better adapted to modern living conditions, without modifying the building structure. Examples: central heating installation, electricity, lift, bathroom, drainage connection, collective TV antenna, security systems, disabled accessibility equipment. The conversion of basement parking spaces into lock-up garages in a residential building is deductible (CE 7-5-1986 n° 39426).

Improvement works for non-residential premises are generally not deductible. The two exceptions are: works to protect such premises from asbestos; and works to facilitate disabled access in professional or commercial premises.

Construction, Reconstruction and Enlargement: Never Deductible

Construction, reconstruction and enlargement works are expressly excluded and cannot be deducted under any circumstances (CGI Art. 31, I-1°), not even under the Art. 13 general principle. This covers:

• Works creating new residential premises, including from previously uninhabitable dependencies;
• Works causing a significant modification of the main structural elements (gros oeuvre);
• Internal remodelling works that, given their scale, amount to a reconstruction;
• Works of enlargement (increasing the volume or habitable surface area, e.g. a surélévation). The ceiling height of attic spaces does not prejudge their prior habitability (CE 28-9-2021 n° 439145).

Tenant Charges Not Recovered (CGI Art. 31, I-1°-a ter)

Charges that are in principle the tenant’s responsibility but that the landlord has paid on the tenant’s behalf and could not recover by 31 December of the year of the tenant’s departure are deductible. These include:

• Utilities and services provided for private or common use: hot and cold water, heating, electricity, lift, carpet cleaning, waste disposal, chimney sweeping, etc.;
• Household waste removal tax (taxe d’enlèvement des ordures ménagères) and street-sweeping tax, where borne by the landlord.

Copropriété Provisions: The Year-Shift Mechanism

Landlords who own copropriété units must deal with the specific deduction mechanism for charge provisions (CGI Art. 31, I-1°-d; Loi 2021-1104 of 22-8-2021 Art. 171). The deductible provisions are those corresponding to current maintenance, operation, and administration expenses for common parts, as defined by Art. 14-1 of the law of 10 July 1965. The deduction follows a two-year mechanism:

• In year N: the landlord deducts the total provisions paid during year N (without examining whether the underlying expenditure is itself deductible);
• In year N+1: the landlord adds back to receipts the provisions deducted in year N, then deducts the actual deductible charges billed by the syndic for year N.

In practice, the copropriétaire bailleur deducts the regularisation statement amount each year after receiving the syndic’s annual accounts.

Insurance Premiums

All insurance premiums relating to the property are deductible (CGI Art. 31, I-1°-c): fire, water damage, third-party liability, landlord’s legal protection, unpaid rent insurance (garantie loyers impayés — GLI), and similar. The premium is deductible in the year of payment.

Deductible Taxes

The following are deductible (CGI Art. 31, I-1°-e as amended by Loi 2022-1726 du 30-12-2022 Art. 75):

• Taxe foncière: deductible in full where the property is let; deducted in the year of payment, not the year to which it relates. Not deductible for the year in which the property first enters letting use;
• TEOM (taxe d’enlèvement des ordures ménagères): the fraction borne by the landlord and not recovered from the tenant;
• Taxe annuelle sur les surfaces de stationnement en Île-de-France: deductible where the landlord bears this tax (BOI-RFPI-BASE-20-50 n° 20);
• Contribution sur les revenus locatifs (CRL): deductible from the revenus fonciers of the members or from the company’s own taxable income (BOI-RFPI-BASE-20-50 n° 20).

The following are not deductible: taxe d’habitation; corporate income tax; personal income tax; other personal taxes. Special rule: where a professional BIC tenant pays the taxe foncière on behalf of the landlord, the taxe foncière cannot be deducted by the landlord.

Loan Interest: The Most Important Deduction

Interest on loans taken out to acquire, construct, repair, maintain, or improve the property is deductible in the year of payment (CGI Art. 31, I-1°-d). This covers: acquisition loans; loans financing deductible works; construction loans (even though the construction costs themselves are not deductible); loans to pay succession duties (droits de mutation à titre gratuit); and loans to finance a deductible eviction indemnity (CE 3-7-2009 n° 293154). Capital repayments are never deductible.

Mixed-Use Property and Pre-Letting Interest

Where a property is used for both letting and personal occupation, interest is deductible only in proportion to the letting fraction, allocated on a surface area basis. During the period between acquisition and first letting (while the property is being fitted out or vacant), interest accruing during that period is deductible against revenus fonciers from the taxpayer’s other rental properties in the same year, provided a genuine intention to let can be demonstrated. If other revenus fonciers are insufficient to absorb the interest, the excess constitutes a déficit foncier subject to the ordinary rules.

Other Deductible Items under CGI Art. 13

Beyond the Art. 31 list, the following are deductible under the Art. 13 general principle:

• Eviction indemnities paid to vacate a tenant where the purpose is to subsequently re-let at improved conditions or a higher rent (CE 8-7-2005 n° 253291);
• Interest on loans to finance a deductible eviction indemnity: deductible regardless of scale (CE 3-7-2009 n° 293154);
• Legal and advisory fees for lease termination with demonstrable re-letting intent (CAA Paris 5-11-2019 n° 18PA01654);
• Rehousing costs borne by the landlord to temporarily rehouse a tenant during renovation works;
• Commissioning costs to bring a property into use for the first time (starting up the boiler, lift commissioning, etc.) necessary for the first tenant to take possession (CE 8-11-1978 n° 8603).

Legal Notice. This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. Always consult a qualified French tax lawyer before any property transaction or significant works decision. Case law citations reflect positions as at March 2025 and should be verified for current applicability.