Scellier legislation: an overview
A new, remarkable scheme which favours rental investment
and an income tax reduction of up to 37% over 15 years!
A new tax incentive
The Robien and Borloo laws which favoured investment in rental properties have been amended by the 2008 Finance Act. The Robien and Borloo schemes will cease at the end of 2009 and will be replaced by the Scellier law which has been effective since the beginning of 2009 and which provides an income tax reduction. The Scellier law provides a reduction in taxes for new properties acquired from 2009 onwards and will be applied to taxation on income for 2009 (declaration made in 2010).
A wider range of beneficiaries
The Scellier law (named after the French politician who introduced the legislation) applies to rental investments made between 1 January 2009 and 31 December 2012 in eligible areas of France. The monthly rental is capped per m2 and varies depending on the area in which the property is located. The property must be rented within 2 months of completion.
Tax advantages
The tax reduction is spread over 9 years and is currently 25% of the purchase price for properties purchased or built in 2010, whether or not they meet the French energy performance standards.
* 25% of the purchase price for properties purchased or built in 2011 which meet the standards,
*15% of the purchase price for properties purchased or built in 2011 which do not meet the standards.
* 20% of the purchase price for properties purchased or built in 2012 which meet the standards,
* 10% of the purchase price for properties purchased or built in 2012 which do not meet the standards.
* If you continue to rent beyond 9 years, you will receive another 2% per annum, for blocks of 3 years, up to a maximum of 6 years (12% in total over the period).
The tax reduction is spread evenly over 9 years and can be extended 6 more years on the condition that the property continues to be rented.
In order to benefit from the tax allowance the owner is obliged to rent out the property for a minimum of 9 years. The Robien and Borloo laws stipulated the same provision.
The Scellier law permits one purchase per year. The investment limit is €300,000 per year.
For example, for a €200,000 investment in 2010, the allowance is €50,000 (€200,000 x 25%) over 9 years, i.e. €5,556 per annum.
What types of property meet the conditions?
The Scellier law encompasses newly built or off-plan properties, previously uninhabitable properties requiring extensive renovations to render them fit for habitation, commercial premises which the taxpayer transforms into a habitation, and properties which are built by the taxpayer.
The property must also meet the French RT2005 energy construction standards. You can rent the property to a family member if you invest under the classic Scellier scheme, but not if you invest under the Social Scellier scheme.
Memo
It is possible to rent the property to a family member. However, it cannot be rented to someone who is part of the same tax household, or if the property is owned by a company which is not subject to company tax, with one of its shareholders or with one of the members of the tax households of one of its shareholders.
Source: www.impots.gouv.fr, Finance Act n° 2008-1443 of 30 December 2008, amended for 2008.
Other investment schemes are available such as, the Girardin, Leasebacks – professional and non-professional (LMPs - Loueur Meublé Professionnel and LMNPs – Loueur Meublé Non Professionnel), Historical Monuments, etc. Anthony Investments is available to advise which type of investment is most suited to your wealth planning and tax situation.
Our selection of the month
Les jardins de Nérola in Vallauris Golfe-juan
77 apartments
Delivery: 3r quarter 2012
Signature (notary) in 2010
NEW! Located in Vallauris-Golfe Juan, a few minutes' drive from Antibes and Nice, the major economic and tourist centres of the Côte d'Azur. Vallauris town is famed for its creative arts and the neighbouring pleasure boat port of Golfe-Juan, which is internationally known as an attractive, seaside resort. Small residence set over only 2 floors, ranging from studios to 2 bedroom apartments, with its own private, enclosed garden. A dream location bordering Cannes, near local shops and businesses. IDEAL FOR INVESTORS!
Good to know:
Parking, Access control, Videophone, Lift, Communal heating
Example:
Studio apartment + parking
Living area: 23.98 sq.m + terrasse +/- 9 sq.m
Price: € 121,000
Monthly rental (excluding charges): € 450
Return (excluding charges): 4.46 %
Contact: Corinne, +33 (0) 4 93 65 32 23, +33 (0)6 65 33 86 20, yourpropertypa@antco.com