De Robien system with tax advantages ...
To perpetuate the aid to rental property, the 1999 finance law instituted tax exemption on income generated by this kind of investment. It concerns new or non-existing accommodation (Vente en Etat Futur d'Achèvement or VEFA)
What advantages ?
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A deduction on the income of up to 65 % of the purchase price of the accommodation: Based on 8 % during the first 5 years, 2.5 % during the following 4 years, with a possible extension during a further 6 years.
(5 X 8 %)+(10 X 2.5%) = 65%
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Possibility to deduct the property tax deficit of up to 10 700 € par an.
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Rent security: the rent allowance can be directly transferred to the owner. If the tenant is employed in a company paying 1% housing contributions, he can benefit from a rent guarantee.
What are the disadvantages ?
- The owner undertakes to rent the vacant accommodation during 9 ans.
- The renting must come into effect in the 12 months following the taking of possession of the accommodation.
- The standard deduction on the rent taken passes from 14 % to 6 %.
- Possibility to rent to ancestors or descendants subject to the interruption of the operation
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