In addition to rental investment, the mechanism of land deficit allows you to optimize your taxes. The owner of a rented property deducts a certain number of expenses from his property income in order to calculate the net property income, which will be taxed at the income tax scale. The idea is to maximize the deductible expenses via major works in order to create a property deficit. Since the expenses are higher than the property income, the latter escapes taxation. But there is better! The property deficit can be imputed to the owner’s overall income under certain conditions: the taxpayer can deduct up to 10,700 euros of property deficit from his taxable income, the excess can be carried forward and deducted for six years from his overall income, and for ten years from his property income.
This system is very efficient from a tax point of view: a taxpayer taxed in the marginal bracket at 30%, imputing 10,700 euros of property deficit on his overall income, achieves a tax saving of 3,200 euros. “This is quite comparable to the tax advantage of a transaction Pinel”, says Stéphane van Huffel, co-founder of NetInvestissement. In addition, the rental yield will be better, because the purchase price, for old properties, is lower than for new ones, even taking into account the work.”
But be careful, this involves buying a property in poor condition to completely renovate it. “You therefore need to be able to manage the work and the sometimes fluctuating deadlines,” adds Mylène Chartrou, general manager of Stellium Immobilier. “It is also possible to go through a specialized operator providing turnkey properties, from purchase to final renovation.”
This is particularly the case of the François 1 groupsEastCIR (Real Estate Restoration Company) or Histoire & Patrimoine (subsidiary of the developer Altarea). Finally, be careful about one last point: the land deficit is reserved for properties rented empty for residential use, within the framework of the real estate tax regime. It therefore does not apply in the event of an option for micro-land.