You are currently viewing Explanations from your La Rochelle concierge on the measures and impacts of the 2023 finance law

Explanations from your La Rochelle concierge on the measures and impacts of the 2023 finance law

Each year, new adjustments are voted by the State to guarantee favorable growth for the country and offer the best possible support. Among these revisions, the finance law is defined by determining the financial and budgetary balance resulting from an exercise. Owners and rental investors should pay attention to this law, because it is the cause of a significant regulatory change in the field of real estate. Your La Rochelle Concierge explains to you what are the changes brought by the 2023 finance law and how to best adapt to them to make your rental purchase grow without problem. 

What is the 2023 finance law

Promulgated at the end of December 2022, the 2023 finance law is a legislative text setting the tax and budgetary rules for the full year. Adopted by the government each year, it aims to regulate the national economy and encourage the development of certain sectors such as real estate. 

This law adapts to the ecological and geopolitical context to define effective solutions and guarantee the growth of the areas it covers. This is why it reviews tax obligations, financial assistance and tax rates related to property ownership each year. Following the various events that have occurred in France and on the continent, the text voted for 2023 tends towards maintaining a tax shield for companies, but also towards an increase in electricity prices. 

The 2023 finance law includes provisions aimed at promoting the construction of affordable housing, improving urban renewal, encouraging investment in certain geographical areas or promoting the rental of housing at accessible rent levels. Discover the impacts of this new legislation for property owners or investors.

What changes for owners

If you own a rental property, the 2023 finance law affects you directly. Here are the biggest changes noted by your La Rochelle concierge. 

VAT

One of the important points of the 2023 finance law concerns the VAT applicable to certain real estate. With the new provisions, the VAT rate may vary depending on the nature of the good and the geographical area. This measure aims to promote the construction of affordable housing and real estate development in certain regions.

As for the VAT applicable to energy renovation work, the 2023 finance law regulates the conditions for the application of VAT at 5,5% a little more. As a reminder, two rates were available for the works: the normal VAT rate of 20% and two reduced rates of 10% and 5,5%. If you wish to benefit from the reduced rate of 5,5% in 2023, you must: 

  • carry out work in premises that are more than two years old;
  • incur benefits for a dwelling for residential use; 
  • choose a renovation involving the installation, maintenance or installation of equipment aimed at saving energy. These can be renewable energy sources;
  • the work must improve the thermal insulation, the production of water, the heating of the accommodation, or even the overall ventilation.

Tax systems

The 2023 finance law confirmed and adjusted several tax measures aimed at encouraging investment in real estate. Each of these arrangements offers specific tax advantages and addresses particular situations. Here are the main devices affected.

The Malraux device: 

This system aims to encourage the renovation of real estate located in degraded areas (QAD). By investing in the renovation of these properties, the owners can benefit from a tax reduction proportional to the expenses incurred. This can reach up to 30% of expenses. The Malraux system is extended until December 31, 2023 by the finance law. 

The Denormandie device:

This system is also extended until December 31, 2023. This encourages investment in old rental real estate in areas where the supply of housing is insufficient. By investing in housing to be renovated, investors can benefit from a tax reduction of up to 25% of the amount of the work.

The Pod deduction: 

Renewed until December 31, 2024, the Cosse deduction allows owners to benefit from a tax reduction by renting their property at affordable rent levels. By agreeing to rent their accommodation under an agreement with the State, owners can obtain a tax reduction of up to 85% of their rental income.

Focus on energy renovation with the MaPrimeRénov' system 

MaPrimeRénov' is an energy renovation aid scheme open to all households. There is also a second scheme called MaPrimeRénov' Sérénité. This is a simplified version reserved for households with modest and very modest incomes. Both schemes aim to encourage energy renovation work to improve the energy efficiency of housing and reduce the environmental impact.

The finance law modifies MaPrimeRénov' to allow more efficient renovation operations and a tax credit for the expenses of SMEs in energy renovation. 

Your La Rochelle concierge will help you understand the 2023 finance law

As an Airbnb agency, your La Rochelle concierge gives you all the keys to improving the profitability of your property and making your rental investment grow. This is why we have gathered the most relevant information related to your rental activity. 

Note that since January 1, 2023, the tax imposed on vacant housing has increased compared to previous years: 

  • the first year: 17% instead of 12,5%
  • from the second year: 34% instead of 25%

You should also know as a lessor owner that the municipalities can increase the housing tax on second homes by between 5% and 60%. This remains valid whether the accommodation is rented or not. 

Your La Rochelle concierge informs you that, as an owner subletting part of your main residence, you are also affected by the finance law. You can benefit from a tax exemption on your rental income. This exemption is extended until July 15, 2024 and is valid for rentals serving as the tenant's main accommodation and not exceeding the ceilings set by the tax authorities.

Ask your concierge in La Rochelle YourHostHelper to guide your investment and make the best real estate choice. 

The finance law is a reference for all real estate investors. It has a direct impact on the profitability of rental properties and on the wisest choices to be made as owners. The 2023 finance law brings important measures for the sector with the extension of several important tax measures, the increase in VAT on certain real estate products as well as new aid for your energy renovations. Do not hesitate to request the services of your concierge in La Rochelle to benefit from personalized support in your real estate project.