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Finance Act 2012: changes for housing.

Since the first of January, with the application of the 2012 Finance Law, the plan of force now extends to the housing sector. Thus, some measures have emerged to fill the deficit of the State by reducing tax loopholes or increasing certain taxes, but also to curb the explosion of rental rates. That's why this week, HandymanDuanche invites you to discover these new reforms that are changing the French real estate landscape.


Increase in VAT on home improvement work.

First blow, for building contractors, but also for individuals; the increase in VAT on renovation works from 5.5% to 7%. However, VAT will remain at 5.5% for quotes signed by both parties before December 20, 2011 and when a deposit has been cashed before that date. However, this measure does not concern Guadeloupe, Martinique and Reunion Island where this rate remains unchanged at 2.10%

Reduction of tax loopholes.

Finance Act 2012: changes for housing.: changes

Another point of this law, the reduction of many tax deductions that may well weigh on the budget of the French. For example, the "Scellier tax reduction *" for rental investments goes from 21 to 13% for new homes that meet the BBC (low energy building) standard and is completely eliminated for other dwellings. The same applies to student housing, recreation and health residences which only entitle to a tax reduction of 11% instead of 18%. In addition, tax credits for the installation of energy production equipment using a renewable energy source or for a heat pump are also revised down with an average of 10% less. It should also be noted that the tax deduction for capital gains on secondary residences goes from 15 to 30 years.

Hardening of the loan at zero rate.

While the zero-rate loan, the PTZ + was a help for future buyers, they will have to do without it if they invest in old housing. Indeed, the PTZ only concerns new housing and purchases in HLM. In addition, this loan which was accessible without means test is now subject to ceilings based on geographical areas, income and family composition. Thus, this year, the budget granted to the zero interest loan is estimated at 820 million euros against 2.6 billion in 2011.

Tax on abusive rents.

To fight against abusive rents, the law of confidence 2012 provides an annual tax on housing located in the Paris region and in large cities whose area is less than or equal to 14 square meters whose rent exceeds 40 euros excluding charges per square meter. This tax would correspond to an amount between 10 and 40% of the rent. Regret that this measure concerns only very few homes, because even in the Paris region, in the most popular neighborhoods, rents rarely exceed these ceilings except for very small areas rented generally to black.

Finally to conclude on good news, HandymanDuanche informs you that the PLA (personalized assistance for housing) is indexed according to the reference index of rents and thus increases by 1% compared to last year.

* The law Scellier is a measure in favor of rental investment, it gives the right to a tax reduction spread over 9 years.


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