Description:

After the end of this year the tax reductions made available on the value of property bought to let is being reduced from 25%. On 1 January 2011, the tax reduction, under the Loi Scellier, will be reduced to 15% and in 2012, even further to 10%.

Of course, such lucrative investments only concerns investors who are 'tax resident' in France and properties that are purchased specifically for letting.

The following illustrations show the potential tax advantages and percentage return over 9 years.

Example 1

 Investment:  100 000€

Tax reduction: 25,000€ over 9 years = 2,777.77€ per annum

Example 2

Investment:  300,000€ (upper limit for application of tax reduction)

Tax reduction:  75,000€ over 9 years = 8,333.33€ per annum

Example 3

This case assesses the possible return over 9 years from a property let based on:

Purchase Price (inc costs): 234,000€

Rent at 685€ per month (over 12 months): 8,220€

Tax Benefit: 234,000€ x 25% = 58,500€ over 9 years = 6,500€ per annum

Annual Percentage Return over 9 years = 8,220€ + 6,500€/234,000€

This equates to a rate of 6.3% per annum

Readers interested in buy-to-let opportunities in Normandy should check out the properties for sale in the Property section of Guide2Normandy but should also take professional tax and accounting advice before proceeding with any investment of this kind.

Why not use our RSS feed and receive news updates as soon as they are posted ?

Check out Guide2Normandy for Normandy Property, News, Places to visit,  Businesses, Places to Eat, Places to Stay, Classifieds and Events.