The Earth Summit in 1992, the Kyoto Protocol in 1997, the inclusion of the ‘Charter of the Environment’ in the French Constitution... All these events have already prefaced a major social fight in the 21st century: the environmental question. Today, construction and renovation work in real estate respects thermal and environmental regulations. Real estate professionals, as well as government institutions, have taken these additional requirements into account and therefore act accordingly.
The French State has promoted strong taxation measures in order to stimulate the real estate market with environmental considerations. The incentives resulting from the Grenelle de l'environnement are supported by various systems, each aimed at promoting the attractiveness of ecological residences and at reducing the cost of applying the new thermal standards.
The Pinel law and the Censi-Bouvard measure
The Pinel law is a measure allowing investors in rental real estate to benefit from a tax credit of up to 21% of the value of the property. The Censi-Bouvard measure allows you to benefit from a tax reduction of 11% on the price of the property, provided that the investment helps to promote tourism, the creation of a retirement home or student housing.
Buildings that comply with the new thermal requirements in respect with the standards currently in place can also claim an environmental tax exemption. These financial incentives are coupled with a growing attraction for environmentally-friendly homes, labelled RT2012 or BBC, which therefore benefit from high rental demand and rents above the national average.
The Malraux law for historic real estate properties
The Malraux law applies for old building renovations as part of a rental investment for a minimum duration of 9 years. The purpose of this law is to keep heritage safe and preserve historic buildings while adapting surfaces to modern environmental requirements.
Indexed to the geographical location of the location, tax deductions can be very interesting. In protected areas, they reach up to 30% of the total price of the building, within the ceiling of 100,000 euros per year. In the context of renovation work justifying a rental project and reinforcing the energy quality of the building, buyers also benefit from a 5.5% VAT reduction.