French General Tax Code
In forceI. - Taxpayers domiciled in France within the meaning of Article 4 B can benefit from an income tax reduction for the acquisition, from 1 January 2009 until 31 December 2022, a new dwelling or a dwelling in a future state of completion or a dwelling that has been completed for at least fifteen years that has undergone renovation or refurbishment or that undergoes renovation or refurbishment work if the renovation or refurbishment work makes it possible, after its completion, to satisfy all of the technical performances mentioned in II of Article 2 quindecies B of Annex III, which they are intending for furnished letting not carried out on a professional basis and the proceeds of which are taxed in the industrial and commercial profits category when this accommodation is included in:
1° An establishment mentioned in 6° or 7° of I of Article L. 312-1 du code de l'action sociale et des familles, a residence with services for the elderly or disabled that has obtained the "quality" approval referred to in article L. 7232-1 du code du travail or the authorisation provided for in article L. 313-1 of the Code de l'Action Sociale et des Familles for its home help and support service covered by 6° or 7° of I of Article L. 312-1 of the same code, or all of the accommodation allocated to the paid foster care of elderly or disabled people, as provided for by Articles L. 444-1 à L. 444-9 of the Social Action and Family Code managed by a social or medico-social cooperation group;
2° A residence with services for students;
3° (repealed); (1)
4° An establishment providing long-term care, mentioned in the penultimate paragraph of article L. 6143-5 of the Public Health Code, and including accommodation, to people who are not living independently and whose condition requires constant medical supervision and maintenance treatments.
II. - The tax reduction is calculated on the basis of the cost price of the homes, with the portion below €300,000. When it is acquired in respect of a property that has been completed for at least fifteen years and has undergone renovation work, it is calculated on the purchase price plus the amount of this work.
The rate of the tax reduction is 25% for properties acquired in 2009 and 2010, 18% for properties acquired in 2011 and 11% for those acquired from 2012.
However, for homes purchased in 2012, the tax reduction rate remains set at 18% for purchases for which the taxpayer can prove that he or she has made a commitment to invest in property by 31 December 2011 at the latest. As a transitional measure, the commitment to make a property investment may take the form of a reservation, provided that it is registered with a notary or the tax department before 31 December 2011 and that the notarised deed is signed by 31 March 2012 at the latest.
When the property is held jointly, each joint owner benefits from the tax reduction up to the limit of the share of the cost price, plus any expenditure on renovation work, corresponding to his or her rights in the joint ownership.
The tax reduction is spread over nine years.
For housing acquired new, in a future state of completion or completed at least fifteen years ago and having undergone rehabilitation, it is granted in respect of the year of completion of the housing or that of its acquisition if later, and deducted from the tax due in respect of that same year and then from the tax due in respect of each of the following eight years at the rate of one-ninth of its total amount in respect of each of these years.
For homes completed at least fifteen years ago and undergoing renovation work, it is granted in respect of the year in which the work is completed and deducted from the tax due in respect of that same year and then from the tax due in respect of each of the following eight years at the rate of one-ninth of its total amount in respect of each of those years.
When the fraction of the tax reduction chargeable in respect of a tax year exceeds the tax owed by the taxpayer in respect of that same year, the balance may be charged against the tax owed in respect of subsequent years up to and including the sixth year.
III. - The owner must undertake to let the property to the operator of the establishment or residence for at least nine years. This rental must take effect in the month following the date:
1° of completion of the building or its acquisition if later, for housing acquired new or in a future state of completion;
2° of acquisition for new housing completed at least fifteen years ago that has undergone rehabilitation;
3° of completion of the work for housing completed at least fifteen years ago that has undergone rehabilitation work.
In the event of non-compliance with the rental commitment or sale of the property, the reduction applied is subject to a reversal in respect of the year in which the commitment is broken or the property is sold. However, in the event of disability corresponding to classification in the second or third of the categories provided for in article L. 341-4 of the Social Security Code, redundancy or the death of the taxpayer or one of the spouses subject to joint taxation, the tax reduction is not reinstated.
The reduction does not apply to housing where ownership is divided. However, where the transfer of ownership of the property or the dismemberment of this right results from the death of one of the spouses subject to joint taxation, the surviving spouse entitled to the property or holder of its usufruct may apply to have the benefit of the reduction provided for in this article reinstated, under the same terms and conditions, for the period remaining at the date of death.
IV. - A taxpayer may not, for the same dwelling, benefit from both the tax reductions mentioned in articles 199 undecies Aand 199 undecies B and the provisions of this article.
