New taxes, new exemptions and renewals: What owners need to know !
The year 2024 brings its share of changes in the field of real estate taxation, with adjustments that will directly affect owners, investors and the real estate market as a whole. These new measures, often designed to encourage certain behaviors or to respond to specific socio-economic issues, require special attention from all those who own real estate or plan to acquire it. Here is an overview of the main tax news that will come into force this year:
1. Review of tax exemption schemes:
Real estate tax exemption schemes, such as the Pinel law, the Censi-Bouvard scheme or the LMNP regime (Non-Professional Furnished Rental Company), are subject to an in-depth review. The aim is to adjust these measures in order to better target investments, in particular by favoring geographical areas where rental demand is strong and by imposing stricter criteria in terms of energy performance of the housing concerned. In 2024, this is the last chance to benefit from the Pinel system, which remains attractive although its advantages are less significant than in previous years. The tax reduction rates for this year are as follows: 9% of the purchase price for a 6-year rental commitment, 12% for a 9-year commitment and 14% for a 12-year commitment. Find our article on the PINEL Zone A law for the municipalities of Thonon and Evian les Bains HERE.
2. Encouragement of energy renovation:
Faced with the climate emergency, public authorities are increasing their desire to encourage the energy renovation of real estate. Thus, new tax incentives are being put in place to encourage owners to undertake work aimed at improving the energy performance of their homes. These incentives take the form of tax credits or tax reductions proportional to the expenses incurred for the work. The Denormandie system also offers tax reductions to owners when they undertake at the time of acquiring a property to renovate it and then rent it at capped rents and to tenants with modest incomes. However, the property must be located in a city that is eligible for the system. The reductions are calculated based on the rental period: 6 years for a reduction of 12%, 9 years for a tax reduction of 18% and 12 years for a reduction of 21%.
3. Extension of taxation on vacant housing:
In order to combat the housing shortage, the authorities are increasing the taxation of vacant housing. Owners of homes that have been unoccupied for a certain period of time will be charged an additional tax, thus encouraging the placing of these properties on the market. Support measures are also planned to facilitate the transformation of these accommodations into rentals or main residences. In 2024, the tax on vacant housing previously applicable in tense areas will be able to be applied in more municipalities listed in the decree of August 25, 2023.
4. Evolution of property taxes:
Property taxes also undergo some adjustments, in particular to take into account the real value of real estate. Cadastral revisions are planned in several regions in order to update the cadastral values of properties, which may lead to variations in the amount of property taxes. At the same time, measures aimed at limiting the sudden increase in these taxes for low-income owners are also being put in place. The property tax, which has already seen an increase of 7% in 2023, will undergo a further significant increase of at least 3.9% this year, caused by inflation.
5. Introduction of the tax on second homes:
In areas where real estate pressure is particularly strong, a tax on second homes is introduced. This tax aims to discourage the acquisition of housing intended solely for occasional residence purposes, thus helping to free up properties on the rental market and to combat real estate speculation. In 2024, as well as for the tax on vacant housing, the increase in the housing tax on second homes previously applicable in tense areas will be able to be applied in more municipalities listed in the decree of August 25, 2023.
6. Last year to benefit from Loc’Avantages:
2024 is the last year to benefit from the Loc’Avantages system. As a reminder, this system offers landlords tax advantages when they rent at capped rents, intended for tenants with modest incomes for a period of at least 6 years. This system is interesting since the lower the rents set, the greater the tax reductions!
7. Taxation of rentals of furnished tourist accommodation:
Difficult to ignore, the 2024 finance law retained a rule “by mistake”, according to the government, relating to the taxation of rentals of furnished tourist accommodation. Previously subject to the micro-BIC regime with a reduction of 71% for an annual turnover of less than €188,700, the tax system now offers a reduction of only 30%, rising to 51% in relaxed zones, with a threshold of 15 000€. The tax administration has authorized the maintenance of the old tax rule for the 2023 income declaration. The Le Meur law currently being adopted will clarify this point for 2024 income.
8. Extension of the tax exemption when renting part of your main residence:
This year, the finance law extended the tax exemption on rents received for the rental of part of the main residence, subject to ceilings set annually by the tax administration. In 2024, the new ceilings have not yet been published, so those for 2023 apply, i.e. €199/m² rent excluding annual charges in Ile de France and €147 in other regions. Renting a guest room in your main residence remains exempt as long as the annual income from this activity does not exceed €760.
In conclusion, the year 2024 brings its share of changes in the field of real estate taxation, with measures aimed at directing the behavior of owners and investors in a direction more in line with contemporary issues, such as the energy transition and access to housing. It is essential for players in the real estate market to keep informed of these developments in order to make the best decisions in terms of managing their assets.
DECORDIER immobilier agencies can help you with your real estate project:
- Thonon +33 (0) 4 50 72 31 95 / e-mail : thonon@decordier-immobilier.com
- Evian +33 (0) 4 50 75 15 15 / e-mail : evian@decordier-immobilier.com
- Grand-Baie : +230 268 2828 / e-mail : contact@decordier-immobilier.mu
www.decordier-immobilier.com