The Duflot Law to bring much-needed relief

The new government is placing great hope in the new Duflot law.

NEW MEASURES UNDER THE SOCIALIST PRESIDENT

Most of us have been informed of the essential new projects that F. Mitterrand’s successor, in power since the spring of 2012, sought to implement. Among the most highly anticipated is the initiative aimed at supporting young French graduates who face constant job insecurity upon completing their degrees.

Furthermore, we are set to see the emergence of measures designed to better regulate the shortage of eco-friendly rental housing.

Regarding this final point, the president will continue to grant tax breaks to those who can afford them. Indeed, as long as their investments continue to rebalance the housing supply and demand in France, there is no reason for this to stop. The laws passed by the National Assembly are not intended to benefit only a segment of the population.

Ministerial orders established since 2008, implemented under the Republican presidency of the previous president, will be modified or repealed.

In our case, in order to reduce the waiting period for acquiring an apartment, the Scellier law—which remains valid until the end of 2012—will be reconsidered.

The latter was intended for real estate investors. For anyone looking to purchase new apartments (to be used as rental properties), the law provided for returns on investment. They were able to deduct a percentage of the total purchase price from their tax returns.

Everyone was satisfied: investors saw tax reductions and periodic rental income. Those applying to the State for housing could secure affordable rent, and the State could take pride in offering more housing to potential tenants.

THE SMALL PROTECTED ASSETS UNDER THE DUFLOT LAW

With the Duflot law (which will replace the Scellier law as of January 1, 2012), the goal is to provide support to a more vulnerable population. In their interest, the State will make newly constructed apartments available to them. Rents will be more strictly regulated, and housing will be more environmentally friendly.

As for investors, they will not be left behind. In fact, the offer remains nearly identical: they will still be able to claim a tax credit of up to 20% of their purchase price, unlike the 22% maximum currently provided under the Scellier amendment.

If you would like to run a simulation or require more details regarding the Duflot law, please contact the specialists at the institut de la défiscalisation.