Budget/Housing: A new scheme under consideration to boost rental investment

A new rental investment scheme, which could be named after the current Minister of Housing Vincent Jeanbrun, is among the amendments adopted on Tuesday, January 20, in the revenue section of the budget, on which the government has committed its responsibility by using Article 49.3.

An initial version of the "private landlord status", a tax advantage intended to encourage individuals to invest in housing for rental purposes, was adopted in November by the National Assembly and voted on in December by the Senate.

But it immediately drew criticism from property developers, as it was very far removed from the recommendations made in a parliamentary report published in June.

The new "Jeanbrun scheme" proposed on Tuesday goes further than the previous version. For investment in new construction, it provides for a tax depreciation of 3,5% per year for intermediate rent housing capped at 8.000 euros, 4,5% for social housing capped at 10.000 euros and 5,5% for very low-income housing capped at 12.000 euros.

The scheme is conditional on a commitment to rent out one's apartment for nine years and does not include zoning, which means that it applies everywhere in France.

According to a government source, "the new feature is that the investor can deduct their property deficit from their overall income, meaning that if they have 50.000 euros of income per year and a property deficit of 10.000 euros, they will no longer be taxed on 50.000 euros but on 40.000".

For older apartments, the scheme is conditional on carrying out work representing 30% of the purchase amount and provides for depreciation of 3% for intermediate housing, 3,5% for social housing and 4% for very social housing with a ceiling of 10.700 euros.

Up to 21.400 euros of property deficit can also be deducted from total income until 2027.

"This is very good news because we will be able to strongly revive the housing sector. This scheme will create a supply shock and allow us to build nearly 50.000 more homes per year," Minister Vincent Jeanbrun told AFP, adding that he wanted to send "a very strong signal to the housing world."

"This is the first time a scheme has offered both depreciation on the investment and a deduction from overall income," a government source assures, judging this scheme "more interesting than the Pinel", which ended on December 31, 2024.

According to government calculations, this measure, which was developed with the real estate sector, should generate more than 500 million euros in tax revenue.

Illustrative image of the article via Depositphotos.com.