Building works performed on French property that has been rented are tax deductible but the landlord must be aware that there are some limitations on the nature of the works and their timing. Foreign investors in France derive income from rented property and want to know more about any legal matters can request the services of our law firm in France.
Types of works that can be performed on rented French properties
Landlords in France have the option of choosing the type of taxation for the rental income: standard fixed cost allowance or the deduction of the actual eligible costs. This applies for furnished or unfurnished properties and to residents and non-resident property owners.
Those who choose taxation based on actual costs can benefit from tax deduction for repair, maintenance and improvement works whose values are charges against the rental income. Major construction works do not fall into this category but the accepted types of work include:
- repairs and maintenance: any works aimed at restoring the building to good condition but which do not interfere with the configuration of the building;
- improvement works: those that will provide improved or new features like an increased level of comfort, without changing the structure of the building;
- “do it yourself” works: only for the cost of the materials.
Major construction works are not deductible because they are thought to increase the market value of the house.
The timing of the building works for rented properties
Building works carried out and paid for in a year previous to that in which the property was let are not deductible. The only way the costs are deductible is if they are paid the same year the property is rented. The rules can be more flexible for works carried out between lettings.
As a landlord in France you can benefit from these tax deductions and carry out more than one deductible type of work before letting the property.
For information about other tax deductions or incentives as well as the taxation of income from rented property
you can contact our law firm in France