Can your home loan allow you to benefit from a tax credit? Yes, it is possible, but in the rental segment. It also remains to find out about the legislative systems and their validity over time.
Real estate credit and tax reduction: the prerequisite
The law in force is clear. The tax credit granted for interest on loans contracted for the acquisition or construction of the main dwelling is abolished for loan offers issued after January 1, 2011, explains the tax administration. Therefore, to benefit from a tax reduction thanks to a mortgage in 2018, you must opt for the acquisition of an apartment or a house that is intended for rental.
Old and / or furnished rental investment
The Malraux system, in force since 2013, oversees rental investment in the former. To benefit from it, the property for which a mortgage has been taken out must be located in a protected sector or in a historic district. In addition, it is its renovation which gives entitlement to a tax reduction, between 22% and 30% of the amount of work carried out.
This tax reduction can be supplemented by the Censi-Bouvard law. This, applicable until December 31, 2018, makes it possible to deduct from its tax 11% of the amount of the acquisition of a property, provided that the latter is offered in furnished rental to a student, a senior, or at a public health facility.
Pinel law: tax reduction if new rental purchase
Promulgated in 2014, the Pinel law is applicable until January 1, 2022. It grants a tax rebate of up to 21%. For this, it is necessary to acquire a new housing or in future state of completion intended for the hiring in an area where the supply of available housing remains lower than the demand.
On the other hand, the investor agrees to rent this property for 6, 9 or even 12 years. The Pinel law makes it possible to deduct from its taxable rental income the interest and guarantee costs of the mortgage, but also the property tax and the costs linked to rental management, among others. An opportunity which, like the Malraux and Censi-Bouvard schemes, encourages investment, the best way being to use a mortgage loan comparator like that of Cream Bank.