French General Tax Code
In forceI.-A.-Taxpayers domiciled in France, within the meaning of the article 4 B, is entitled to a reduction in income tax on the property it rents out, subject to the following conditions:
1° The property is let under one of the agreements mentioned in articles L. 321-4 or L. 321-8 of the French Construction and Housing Code, for which the date on which the application for approval is registered by the Agence nationale de l'habitat is between 1 March 2022 and 31 December 2024;
2° The property is rented out unoccupied as the main residence for the entire duration of the agreement referred to in 1° of this A ;
3° The rent and the tenant's resources, assessed on the date the lease is signed, do not exceed ceilings set by decree depending on the location of the property and whether it is to be rented on an intermediate, social or very social basis;
4° The lease is not entered into with a member of the taxpayer's tax household, an ascendant or descendant of the taxpayer or with a person already occupying the property, except when the lease is renewed.
B.-The tax reduction applies, under the same conditions, to the shareholder of a company not subject to corporation tax that is domiciled in France, within the meaning of Article 4 B, when the property is let through the said company, provided that :
1° The shareholder retains all of his shares throughout the term of the agreement referred to in 1° of A of this I;
2° The lease is not entered into with one of the shareholders of the company that owns the property or with a member of the tax household, an ascendant or a descendant of such a shareholder.
II.-The tax reduction applies to homes for which the taxpayer can demonstrate compliance with an overall energy performance level set by a joint order of the ministers responsible for housing, energy and the budget.
III.-The tax reduction is calculated on the amount of gross income from the property mentioned in I.
Where the property is jointly owned, each joint owner benefits from the tax reduction up to the limit of the share of gross income corresponding to his or her rights in the joint ownership.
Where the property is owned by a company that is not subject to corporation tax, the taxpayer benefits from the tax reduction up to the limit of the share of gross income corresponding to his or her rights in the property concerned.
IV.-The rate of the tax reduction is set at :
1° 15% for housing allocated to intermediate rental under the agreement mentioned in article L. 321-4 of the French Construction and Housing Code;
2° 35% for housing allocated to social rental under the agreement mentioned in article L. 321-8 of the same code.
However, when the dwelling is given under a management mandate or leased to a public or private organisation approved pursuant to article L. 365-4 of the said code, either with a view to its letting or subletting, furnished or unfurnished, to persons mentioned in II of article L. 301-1 of the same code or to natural persons whose situation requires a transitional rental solution, or with a view to accommodating these same persons, the rates mentioned in 1° and 2° of this IV are increased:
a) For housing allocated for intermediate rental under the agreement mentioned in article L. 321-4 of the French Construction and Housing Code, to 20% of the gross income from this accommodation;
b) For accommodation allocated to social rental under the agreement mentioned in Article L. 321-8 of the same code, to 40% of the gross income from this accommodation;
c) For accommodation allocated to very social rental under the agreement mentioned in the same Article L. 321-8, to 65% of the gross income from this accommodation.
V.-When the rental of the property is granted to a public or private organisation under the conditions stipulated in the fourth paragraph of IV of this article for the housing or accommodation of individuals for use as their main residence, this organisation must not provide any hotel or hotel-related services and the property may not be rented to the owner of the property, members of their tax household or their descendants or ascendants.
A decree specifies the methods for assessing the rent and the resources of the occupant, as well as the conditions for this type of rental.
VI.-The tax reduction applies from the date on which the agreement referred to in 1° of A of I comes into effect, but no earlier than 1 January 2022, and for the entire term of the agreement.
Where, on the expiry of this agreement, the rental contract for the accommodation concerned is still valid in accordance with the article 10 of loi n° 89-462 du 6 juillet 1989 tendant à améliorer les rapports locatifs et portant modification de la loi n° 86-1290 du 23 décembre 1986, the benefit of the tax reduction is maintained until the date set for the renewal or renewal of this rental contract as long as the same tenant remains in place and all the conditions, particularly that relating to the amount of rent, are met.
VII.-The tax reduction is deducted from the tax due in respect of income for each of the years in the period of application mentioned in VI of this article.
If the taxpayer's tax domicile is transferred outside France during this period, the tax reduction is deducted, under the conditions provided for in the first paragraph of this VII, from the tax established under the conditions provided for in Article 197 A, before deduction of non-dischargeable levies or deductions.
VIII -In the event of a breach of one of the conditions mentioned in this article or the sale of the home or the shares, the tax reduction obtained is subject to a reversal in respect of the year of the breach of the condition or the year of the sale.
However, no repayment is made if the condition is broken or the transfer occurs as a result of disability corresponding to classification in the second or third of the categories listed in article L. 341-4 of the Social Security Code, redundancy or death of the taxpayer or one of the members of the couple subject to joint taxation.
IX.-The provisions of this article are exclusive, for the same dwelling, of those of f to o of 1° of I of article 31 and articles 31 bis, 199 decies İ, 199 undecies A, 199 septvicies and 199 novovicies. Nor do they apply to buildings that are listed or registered as historic monuments or have received the label awarded by the Fondation du Patrimoine, mentioned in the first paragraph of 3° of I of article 156.
