What is the Denormandie law in old real estate?
Denormandie system: a tax exemption law
The Denormandie system, or “Denormandie law” is a tax measure which aims to encourage the renovation of old real estate and the revitalization of city centers in certain areas. The Denormandie system mainly concerns investment in old rental property with work.
A law established by Julien Denormandie
It was established by Julien Denormandie, former Minister responsible for the City and Housing within the Ministry of Territorial Cohesion, hence its name. Included in the 2019 finance law, the Denormandie system complements the Pinel law and reflects the government’s desire to encourage the renovation of existing real estate rather than just new construction.
When does the Denormandie law end?
The end of the Denormandie system had been announced for the end of 2023, but it was first extended until December 31, 2026, then until 31 December 2027 (article 42 of the law of April 9, 2024), which means that acquisitions of eligible goods must be made no later than this date.
What is the main difference between the Pinel law and the Denormandie system?
The main difference lies in the fact that the Pinel law favors investment in new housingwhile the Denormandie system encourages the renovation of old housing. Both schemes aim to boost the real estate market in specific areas in France.
Can we combine Pinel and Denormandie?
An impossible accumulation on the same property
The Denormandie system is not cumulative with the Pinel, the Historical Monuments or the Censi-Bouvard. These tax regimes aim to encourage rental investment, but under distinct conditions. The legislator has therefore provided that the same property cannot benefit from several tax advantages, in order to avoid duplication and windfall effects.
Different possible rental investments
On the other hand, it is possible to combine a Denormandie investment with another tax system on separate propertyprovided that each accommodation complies with the conditions specific to its regime. For example, an investor can own a new apartment in Pinel and another in Denormandie in a renovated old one.
How does the Denormandie law work in 2025?
The Denormandie system is aimed at people who acquire old, degraded housing to renovate it and rent it out, and located in a town where there is a significant need for housing rehabilitation in the city center.
An investment in old degraded rental properties
To benefit from the Denormandie tax advantage, the accommodation must meet the following conditions:
- The property acquired is an old home or premises transformed into residential use.
- The property acquired is unfurnished accommodation intended to be rented as main residence over a long period.
- The rent charged must not exceed a certain ceiling.
- The tenant’s resources must not exceed a certain amount.
- The investment must be made between January 1, 2019 and December 31, 2027.
Work to benefit from the tax reduction
The amount of renovation work undertaken by the owner must represent 25 % of the total cost of the real estate acquisition (purchase price of the property + notary fees + works). To benefit from this tax reduction, the work must:
- either improve the energy performance of housing by 30% for houses and 20% for apartments;
- either correspond to two of the following works: roof insulation, wall insulation, window insulation, boiler change, change of the hot water production system;
- or create a new living space (balcony, garage, etc.).
The work must be carried out by an RGE certified company and completed by December 31 of the second year following the acquisition.
In which cities or areas does the Denormandie law apply?
Cities eligible for the Denormandie system
454 cities and territories, including need for housing rehabilitation is particularly marked, are eligible for the system (full list here). The property can also be located in:
- a municipality labeled or benefiting from the Action Cœur de Ville plan;
- a municipality having concluded a “territorial revitalization operation agreement” (ORT) or equivalent.
The decree of April 10, 2020 removed the limitation according to which the investment had to be located “in the continuous built city center” of the municipality. The reform expanded to the entire municipality.
A system extended in 2024 to certain co-ownerships
Since April 11, 2024, the system has also been extended to properties located in co-ownerships in great financial difficulty or included in the scope of an operation to requalify degraded co-ownerships (ORCOD). This extension aims to strengthen the fight against degraded housing.
Changes since September 30, 2025
A decree of September 5, 2025 modifies the A/B/C zoning and reclassifies 468 municipalities. Although Denormandie is not only subject to zoning, this modification can indirectly influence via rental conditions or the local market. The provisions of the new zoning apply to loans issued as of September 30, 2025.
What is the amount of work to be carried out to benefit from the Denormandie system?
The amount of renovation work undertaken by the owner must represent over 25 % of total cost of the real estate acquisition (purchase price of the real estate + notary fees + works). They must be carried out by an RGE certified company and completed no later than December 31 of the second year following the acquisition of the property.
What are the rent ceilings and resources of the Denormandie program in 2025?
Rent ceiling per square meter in areas affected by the Denormandie system
To be eligible, accommodation renovated within the framework of the Denormandie law must be rented to a maximum monthly rent fixed by geographical area. These ceilings are exclusive of charges and apply to leases concluded or renewed in 2025. Here are the amounts:
Tenant resource ceilings
To benefit from the Denormandie tax reduction, the tenant must not exceed the annual resource ceilings set for the year of signature or renewal of the lease. These ceilings depend on the geographical area of the accommodation and the composition of the household. Tenant resource ceilings
What is the amount of the Denormandie 2025 tax exemption??
Denormandie tax benefit rate
The amount of the tax advantage is different depending on the duration or rental period. In 2025, the rates remain identical to those applied since 2019:
- It is from 12% of total cost of the acquisition if the owner undertakes to rent the property for six years.
- It is from 18% of total cost of acquisition if the owner undertakes to rent the property for nine years.
- It is from 21% of total cost of the acquisition if the owner undertakes to rent the property for 12 years.
Please note that the Denormandie tax reduction applies to taxpayers domiciled in France, as well as to those who buy from a developer who has rehabilitated the building.
Acquisition Expenditure Limits
The amount of acquisition expenses used to calculate the tax advantage is capped at 300 000 euros and to 5 500 euros per square meterdepending on the rental period. The fraction exceeding this amount will not be taken into account in the basis for calculating the reduction.
In practice
For example, for the purchase of real estate for 225,000 euros and renovation expenses amounting to 100,000 euros, i.e. a total cost of 325,000 euros, the tax assistance will then only be calculated on the basis of 300,000 euros.
How to benefit from the Denormandie system?
Declare the investment to the tax authorities
To benefit from the tax reduction, you must declare the investment at the time of annual income tax return and attach a certificate from the company certifying the nature and cost of the work, the corresponding invoices and, where applicable, supporting documents relating to the eligible municipality (Action Cœur de Ville or ORT).
Take advantage of the tax reduction
The tax reduction is spread over the rental commitment period (six, nine or twelve years) and is taken into account in the overall ceiling for tax loopholes of 10,000 euros per year. The amount of the reduction is calculated on the basis of the total investment (purchase + work), within the limit of 300,000 euros per year and 5,500 euros/m².
