French Buy to Let Property Guide

1. Introduction to Buy to Lets in France

For many years the French government have sought to encourage the development of the private sector rental market through the provision of tax incentives to investor landlords.

These tax incentives have been known as 'Robien', 'Borloo', or 'Besson', after the Ministers who introduced them.

The incentives have been built on the principle of granting investors the right to charge a percentage of the acquisition cost against rental income.

In the past the tax relief gained from such schemes was directly proportional to the marginal rate of taxation of investors, benefiting most those on the highest marginal rates.

Since 2009, the schemes have been phased out in favour of a modified approach which grants a direct reduction in income tax, rather than the right to charge depreciation against rental income.

The schemes operate under a new law called Loi Scellier.

This has made these rental schemes far more attractive to those with lower marginal rates of taxation.

The Loi Scellier (named after the French politician who proposed the idea) offers a reduction in income tax of up to 25% of the acquisition cost of a French rental property.

Clearly, however, as the schemes only grant a reduction in French income tax (and not a tax credit), it is not going to be of interest to those who pay no or little income tax in France!

Next Page: Buy to Let Income Tax Reduction