French General Tax Code
In forceI. - An income tax reduction is introduced for taxpayers domiciled in France within the meaning of Article 4 B who acquire, between 1 January 2007 and 31 December 2010, a dwelling forming part of a social purpose hotel residence defined in Article L. 631-11 of the French Construction and Housing Code and which is intended for rental, the income from which is taxed as property income. This tax reduction applies:
1° To the acquisition of new housing or housing in a future state of completion;
2° To the acquisition of housing to be renovated, under the conditions provided for in Article L. 262-1 of the Construction and Housing Code.
II. - The tax reduction is calculated on the cost price of these homes up to a limit of €50,000 for a single, widowed or divorced person and €100,000 for a married couple or partners under a civil solidarity pact subject to joint taxation. The rate is 25%.
III. - Only one tax reduction can be made at a time and it is spread over a maximum of six years. It is granted in respect of:
1° The year of completion of the dwelling or its acquisition if later, for the dwellings mentioned in 1° of I;
2° The year of acceptance of the work for the dwellings mentioned in 2° of I.
IV. - The reduction is deducted from the tax due for the year mentioned in III in respect of one-sixth of the limits of €12,500 or €25,000 and then, where applicable, for the balance over the following five years under the same conditions.
V. - The owner must undertake to rent the property free of charge for at least nine years to the operator of the social hotel residence. This tenancy must take effect within six months of the date of completion of the building or its acquisition, if later. If the commitment is breached or the property is sold, the reduction applied is subject to a reversal in respect of the year in which the commitment is breached or the year in which the property is sold.
Le 5 du I de Article 197 applies.
VI. - The reduction does not apply to housing where ownership is divided. However, when the transfer of ownership of the property or the dismemberment of this right is the result of the death of one of the spouses subject to joint taxation, the surviving spouse who is the beneficiary of the property or the holder of its usufruct may request that the reduction provided for in this article be reinstated in his or her favour, under the same terms and conditions, for the period remaining at the date of death.
VII. - For the same taxpayer, the provisions of this article are exclusive of the application of those of articles 199 decies E to 199 decies G.
