Income tax advantage for investors of new French properties
Income tax advantage for investors of new French properties
A new tax incentive has been introduced in France in an attempt to boost the country's construction industry. The amendment to the 2008 Finance Law benefits people investing in new or redeveloped housing in France.
Under the new initiative, individuals can reduce their income tax when they either invesr in property directly or via a property investment company (SCPI - Société Civile de Placement Immobilier), reports Tax-News.com. The move could benefit those planning on buying a
holiday villa in France.
For any money directly invested throughout 2009 and 2010 in a new or redeveloped residence, individuals can benefit from a 25 per cent reduction in tax of the sale price, spread over nine years. Alternatively, they may choose to absorb their costs under the existing
Robien scheme, which gives income tax breaks to owners of new rental properties.
Should an investor elect to purchase using a SCPI, they will not have a choice of benefit. In this case, an individual will only be entitled to an
income tax reduction of 25 per cent of the sum invested, again spread over a period of nine years.
Once the nine years have passed, an investor may then opt for two further three year periods of an annual tax reduction of two per cent. It should be noted that a maximum deduction of 37 per cent over 15 years is in place. Provided that the investment takes place before December 31 of this year, an individual will be entitled to reduce their 2009 income tax accordingly.
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