Like most investments, real estate does not escape taxation. For the investor, it is especially important to find a way through the jungle of deductions and tax credits. To make it simple : the investor is faced with two major categories of taxes : first on income, then on capital gains. From a certain value, it is also liable to pay the tax on the real estate asset (IFIS), the new formula of the ISF, all of whose financial assets are now exempt. Even the principal residence remains subject to the IFI, after an abatement of 30% for those whose “heritage stone” is in excess of 1.3 million euros.
The taxation of real estate is known for its rules of the game in subtle, or even ambiguous. Of course, the rental investment is more heavily taxed than other investments. While the financial revenues are subject to the new levy one-time lump sum (PFU) of 30%, property income, suffer them to income tax (generally at the rate of 30 or 41%) to which you must add the social contributions (statements of 15.5 to 17.2 per cent from 2018), or a tax of between 47.2% and 58.2 per cent. A figure that, on paper, may seem daunting.
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How to reduce the tax bill?
Except that the State multiplies the carrot of tax to encourage investors to support the construction and renovation. Historical landmarks and old stones (Malraux law) for social housing-overseas (loi Girardin), by way of rental investment nine (Pinel) or ancient social (Pod), many devices promise to lighten the tax bill blows of grant, conditions of respect of rules and a formalism to give the migraine.
“Fill out the form 2044 of property tax return is not simple, but you can do it yourself by following our tutorial, explains Thibault Diringer, founder of the site Corrigetonimpot.fr that offers academic assistance very accessible. On the other hand, the intervention of an accountant is indispensable for the furnished rental in the plan is real, because these are industrial and commercial profits (BIC) requiring a balance sheet and an income statement simplified.”
just for the rental income, excluding the specific incentives, there are two regimes with two sub-regimes : property income, real or micro-foncier to a rental void, the actual profit or micro-BIC for a furnished rental.
When one perceives less than 15 000 € rent per year, the system of micro-foncier has the appeal of simplicity : no need to fill out a detailed statement of land revenue, or to keep accounts. It said its rental income directly on the form 2042 where the declaration pre-filled in other revenues, and there is a tax allowance automatic 30% on its rents, which is supposed to cover the expenses.
With the regime of real income, one can infer, however, all expenses related to its investment : construction, maintenance costs and expenses, non-recoverable, real estate taxes, loan interest and fees credit, loan protection insurance and insurance owner non-occupier, and administrative expenses of the agency, up to the stamps to send receipts.
For the furnished rental, the option of a micro-BIC is the most simple. It gives the right to a flat-rate deduction of 50% on the rents, provided they do not exceed 70 000 € per year.
beyond that, the plan real is mandatory and requires the intervention of an expert accountant. All expenses are deductible, up to the purchase of the property itself, which is the subject of a depreciation reducing the taxation of rental income. On the flip side, this amortization reduces the net book value of the property concerned, which increases the taxation on the capital gain on the resale. Similarly, investments in new rental intended for rent for commercial lease (retirement homes, student residences, etc) are the responsibility of the rental furnished no business (leaseback censi) and give the right to title to the recovery of VAT.
The bush of the real estate défiscalisé
In the case of a real estate investment défiscalisé, nuances are added according to the scheme of taxation in question. Until the end of 2018, the device Censi-Bouvard thus promises a tax reduction of 11% of the price (within the limit of € 300,000, excluding taxes) a new housing unit assigned for nine years to the operator of the student residence or in retirement services, under the scheme leaseback censi.
The law Pinel also promises a tax reduction of 18% of the purchase price of a rental property of nine in consideration of a rental commitment of nine years, a tax reduction of 2% of the investment per year. A tax reduction of 1% per year is possible in the following years, bringing the advantage to 21% of the investment for a rental commitment over twelve years.
This device, was criticised by the Court of auditors for its cost (€1.7 billion per year) and its inefficiency (two-thirds of the housing built in the area little tense), has been extended until 2022, but “refocused” on the areas most strained (aa, A and B1), that is to say, the paris region, the suburbs of French of Geneva, the Côte d’azur and most large cities of the province.
The big bang of the levy at source
Last thorn in the side of the investor : the passage in January of deduction at source. Income from 2018, the so-called “year whiteet”, will not be taxed next year (excluding exceptional income), since it taxera then directly the income of 2019 “at the source”. Suddenly, the discounts and tax credits on the income of 2018 will be deferred for a year. The tax department will make to taxpayers the following year, according to their statement. From 2019, the rent will be taxed by the tax “at source”, in fact, directly on behalf of the lessor, but the tax cuts and the expenses of 2019 will not be taken into account that with their declaration in 2020.
Read our complete file
real Estate: the worrying developments in the private rental market real estate Investment in Pinel: the advantages and disadvantages of rent Increase: what is possible, what is not
taxation of capital gains on real estate is also byzantine. They are exempt from income tax after twenty-two years of detention, but are only exempt from social security contributions only at the end of thirty years, according to dégressivités different. At the end of twenty years, for example, the added value to the resale of a property is exempt on 90% of the tax on income, but three-quarters of this gain undergo to 17.2% in social security taxes !