Land Deficit

When we hear about a land deficit, this most often refers to a tax mechanism that makes it possible to charge charges and deduct them from property income.

This strategy legally implies renting naked for a minimum period of 3 years from the last deficit observed, but it allows the investor to renovate and maintain his property while being supported by a powerful tax impact on his property income in the appropriate context. .

Each year up to €10,700 (see €15,300 in special cases) can be deducted from your income.

If the amount of the land deficit generated exceeds this limit, the residue is chargeable to the income of the following 6 years

property management and administration costs (remuneration of a concierge or costs of a real estate agency or a co-ownership trustee, for example)
taxes related to housing and not recoverable from the tenant such as property tax
repair and maintenance expenses, whether for work caused by the dilapidation of the accommodation or to facilitate its rental*
provisions for charges in the context of a co-ownership
rental charges, not recovered from the tenant on December 31 of the year following his departure
compensation for the eviction or rehousing of a tenant
insurance premiums
interest and borrowing costs.

In this way, it is possible to use or carry over the land deficit over periods of up to 10 years. Over such periods of time, this type of investment requires a well-defined strategy in relation to the investor's context. It is thus very common to see landowners being accompanied by experts in carrying out this type of assembly.

Loan interest is deductible only from property income and not from overall income.

Investing in land deficit is:

Benefit from a system not subject to the capping of tax loopholes against a commitment to rent bare for a minimum period of 3 years from the last deficit observed,
Preferably choose a location in the city center at a good price in view of the works,
Benefit from the possibility for the investor to renovate and maintain his property in the old, being supported by a powerful tax impact on his property income or even, within a certain limit, on his overall income.