Rental property: final stretch to benefit from the Denormandie tax reduction!

The National Assembly adopted, Thursday, October 24, an amendment to the draft budget for 2025 which brings back to December 31, 2026 the extinction of the equivalent of Pinel in the old one.

While the Pinel rental investment scheme in new properties will expire on December 31, 2024, you have a little more time left to take advantage of its counterpart in existing properties, Denormandie. Less time than expected, all the same, because the National Assembly adopted, Thursday October 24, a amendment of the government to the finance bill (PLF) for 2025 which “tightens” the Denormandie, in the words of the Minister of Public Accounts, Laurent Saint-Martin.

A recent mission from the General Inspectorate of Finance “not having concluded that it was effective” from Denormandiethe government is reducing the end of this tax assistance from December 31, 2027 to December 31, 2026. “A completely reasonable extinction”approved the general rapporteur of the Budget at the National Assembly, Charles de Courson, Denormandie having benefited in 2023 from “only 880 households (tenants), at a cost of 10 million euros”.

The renovation must represent 25% of the price of the property

As a reminder, the Denormandie, which has existed since 2019, gives you the right to a tax reduction on income, representing 9% to 21% of the price of the property (cost of renovation work included), if you buy an old home to rent it for between 6 and 12 years, bare, as your main residence, and by committing yourself to renovate it. A renovation whose cost must represent at least 25% of the overall cost of the real estate operation and satisfy one of the following conditions: improve the energy performance of the housing by at least 20 to 30%; include at least two works including changing the boiler, hot water production, insulation of the roof, walls or windows; create a new living space such as a terrace.

Furthermore, the rent must not exceed certain ceilingsthe tenant must not belong to your tax household and his reference tax income cannot exceed certain thresholds. Finally, housing must be located in very specific locations. Namely a municipality concerned by the national plan for the revitalization of medium-sized town centers “City heart action», or a municipality having signed a territory revitalization operation agreement.

Degraded condominiums excluded from Denormandie

The law on degraded housing of April 9 extended Denormandie to investments made in co-ownerships in great financial difficulty and had extended it by one year, until December 31, 2027. But the government’s amendment to the PLF, adopted Thursday, removes not only this temporal extension but also the extension of the system to degraded co-ownerships, the mission of the ‘General Inspectorate of Finance having “noted its difficulties in responding to the challenges of co-ownerships in difficulty”.