The Denormandie Law

The Denormandie Law - outline

Following the collapse of some dilapidated buildings, the government passed an amendment to encourage French taxpayers to invest in old homes to be renovated and put on the rental market.
Since January 1st, 2019, the Denormandie law, named after the Minister of Housing and City Julien Denormandie, thus completed the Pinel law concerning the old properties.
The goal is therefore to fight against the dilapidated housing stock and boost the renovation of old housing in order to eventually have a better quality housing stock in line with the national plan to fight against unsanitary housing and improve attractiveness in the centers of medium-sized towns.

Who is this program for?

The system presented by Julien Denormandie is aimed both at individual investors but also at property developers who thus have the possibility of acquiring entire buildings to resell the apartments in separate units.
This block purchase mechanism by developers will allow individuals to benefit from the new tax system.
The Denormandie 2020 Law therefore concerns every investor, individual or professional, who wishes to renovate a property or a building for rental purposes while benefiting from favorable taxation.

How does it work ?

The Denormandie amendment allows you to benefit from a tax reduction if you make a rental investment in an old degraded district, and it only concerns certain municipalities.
Taxpayers acquiring old housing to renovate intended for rental will benefit from the following advantages:
12% of the amount of the investment in tax reduction, if the lessor owner agrees to rent the property for 6 years.
18% of the amount of the investment in tax reduction, if the lessor owner agrees to lease the property for 9 years.
21% of the amount of the investment in tax reduction, if the lessor owner agrees to lease the property for 12 years.
More information :https://www.loi-pinel-ancien.fr/ Investment

Conditions:
Buy a property to renovate between January 1, 2019 and December 31, 2022.
The accommodation must be located in one of the 245 cities eligible for the scheme.
The owners must commit to renting the property for a period of 6, 9 or 12 years.
Rents will be capped in order to remain affordable.
The owners will have to carry out renovation work, the amount of which must amount to at least 25% of the amount of the acquisition.
The work must be carried out by a certified professional Recognized Guarantor for the Environment (RGE). The work must meet one of these two conditions: (1) Improve the energy performance of housing by 30% for individual housing and 20% for collective housing. (2) Represent at least 2 types of work on a list of 5: attic insulation, change of boiler, insulation of walls, insulation of windows, change of hot water production.

The 2020 finance law completed this list. From now on, it is also possible to benefit from the device for modernization or sanitation work. 

The Denormandie amendment is more or less the same as that of the old Pinel Law. The major difference is that it can expand to more cities. The property must be located in a town participating in the land revitalization operation or be part of the 245 municipalities in the “Cœur de Ville” action plan.
List of municipalities eligible for the scheme: https://www.la-loi-denormandie.immo/conditions/zones/#

Find out more: https://www.service-public.fr/particuliers/vosdroits/F35011