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To buy a property to renovate to take advantage of the deficit land

It is possible to deduce the work done in a home vacant, if it is rented immediately after construction. cheaper to purchase than the new, the old does not hav

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To buy a property to renovate to take advantage of the deficit land

It is possible to deduce the work done in a home vacant, if it is rented immediately after construction.

cheaper to purchase than the new, the old does not have the same tax benefits as those provided for in favour of the rental investment in the new, at least to invest in a program Malraux. But in return, you don't have a rental commitment to subscribe, or rent ceilings or maximum resource of the tenant to comply and you can invest where you see fit.

But price is same, you will have interest to buy a property to renovate in funding the work necessary for its restoration, rather than buying an old property already spruced up. Especially if you are heavily taxed, and in search of a solution to lower the tax burden.

for Tax purposes, renovations to constitute an expense deductible. But you can not in principle be deducted if the property is already rented out and gives you taxable income. Except that ... it is possible to deduce the work done in a vacant shelter at the condition that it was rented immediately after construction, or if this is not the case, that you will be able to show that you have taken the necessary steps to find a tenant and that at no time you do you are reserved for the enjoyment of the dwelling.

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the More your slice marginal is high, the more you earn

If you already have other rental property, this work will be deducted from your other income from land be taxed, which may allow you to reduce both the amount of your income tax but also social security contributions due on the rents (17.2 per cent). If you do not have other income of land, this enables you to see immediately a deficit in land. This deficit is deducted from your other income (such as your wages or your benefits professional) in the amount of 10 700 € per year. And then the surplus, as well as the interest on the loan contracted to finance your purchase and/or your work are deducted from your property income of the 10 years following. The tax savings provided by the deduction depends on your bracket marginal tax. The higher it is, the more you gain.

for example, for a deficit foncier of € 50 000, you can deduct in the first year, 10 700 € of your taxable income. If you are taxed in the bracket at 41 %, this allows you to save 4 387 € ; 4 387 €, which is beyond the comprehensive limits of the tax loopholes and which will therefore be added to the 10 000 € of tax reduction which you can enjoy by the way, if you employ someone in your home, or have made other investments défiscalisants.

The remaining 39 300 € are deductible from your property income of the 10 subsequent years. If you represent 10 000 € rent per year, which is almost 4 years of rent that you will clear and you will have neither tax nor social charges to pay on your rent during this period.

No matter what

Don't be too greedy ! Only the work of maintenance, repair and improvement (or loan interest relating to this type of work) are deductible : roof repairs, restoration of facades, renovation of the electrical installation or heating, installation or remodeling a kitchen, a bathroom, installation of insulated windows, alarm system, ...

You can even deduct some renovation which are normally the responsibility of the tenants (paintings, wallpapers) if you can do this to make it easier to find a tenant. But you can't deduct of the work, which will give an additional value to your home, such as the construction of an extension, conversion of attic space into bedrooms or for the creation of a terrace.

Attention to resale

The deficit will be definitively acquired only if the accommodation is always rented as at 31 December of the third year following the deduction from your overall income.

Read our complete file

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In the clear, you must not re-sell the home, or even recover it for your personal use, even for a few months, or decide to rent furnished during this period ... And in the case of the departure of the tenant, you will need to make every effort to find another job immediately ... otherwise, the tax authorities might question the benefit of this operation !

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