When an owner buys real estate, two options are available to them. He can occupy the accommodation as a primary or secondary residence; or he can offer it for rental. When choosing to rent, the owner generally has to do work before putting the property on the market. However, major work can be very expensive. In order to avoid debt, a tax process makes it possible to obtain tax reductions. But certain very specific conditions must be met to benefit from it.
What is the land deficit?
We call “land deficit” the case where the sums paid by an owner (notably for charges) are greater than the rents he receives. So in deficit, it may be entitled to tax reductions to avoid any financial problems.
What are the advantages of the land deficit?
The land deficit represents a real advantage from a tax perspective. First of all, it helps the owner to lower the amount of his income tax. This makes it possible to encourage future buyers to invest in rental properties. Then, if the deficit in question is greater than the owner’s income, the person can benefit from a surplus carryover. Finally, this system allows certain work aimed at improving the quality of housing to be covered.
Under what conditions is it possible to benefit from the land deficit?
To be entitled to this tax deduction, the property concerned must be offered as a home. In other words, premises offered for rental as commercial property are not concerned. Then, the owner must have opted for the real regime, compulsory in particular when the property income is greater than 15,000 euros per year. Finally, the property in question must be rented for at least three years, until December 31 of the third year following a request for imputation.