French Tax Incentive For Investment In New Housing Construction

by Ulrika Lomas, Tax-News.com, Brussels

11 February 2009

A new tax incentive, designed to boost the construction industry in France by enticing individuals to invest in new or redeveloped housing, has been included in the amended 2008 Finance Law.

Dubbed ‘Scellier’, the initiative enables individuals to reduce their income tax either by investing in property directly, or via a property investment company, or SCPI (sociétés civiles de placement immobilier). The two options available for investors differ slightly:

• For any money directly invested in a new or redeveloped residence in 2009 or 2010, individuals may benefit either from a reduction in tax of 25% of the sales price, spread over a period of nine years, or may elect to ‘absorb’ their costs under the existing Robien scheme.
• For any investment in shares obtained via the SCPI, however, individuals will only be entitled to a reduction in tax of 25% of the sum invested.

In both cases, the 25% reduction in tax is spread over nine years, at which point the individual may opt for a further two three-year periods at 2% per year, although a maximum deduction of 37% over 15 years is in place.

Individual investors will benefit from income tax reductions up to a threshold of EUR300,000 invested in shares per tax year.

Provided that individuals invest before December 31 of this year, they will be entitled to reduce their 2009 income tax accordingly.

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