What do you want to know?
Why invest with the Cosse law?
The "Affordable rental" device called "Pod" allows a specific deduction of land income from new or old housing. It applies to housing for which an agreement with the Anah was signed between January 1, 2017 and December 31, 2022.
The more modest the rent charged, taking into account its location, the higher the tax deduction: from 15 to 70% for a "classic" rental and up to 85% for a joint rental to an approved association, or a rental by the intermediary of a management mandate with an approved social real estate agency (rental intermediation).
The “Affordable Rent” scheme is aimed at owners of a property placed on the rental market in order to encourage them to set a reasonable amount of rent accessible to low-income households having difficulty finding housing in the city.
The reward therefore takes the form of a tax deduction from rental income, which varies according to the effort made by the lessor.
The "Cosse" device is intended for owners who wish to rent out accommodation and who wish to limit the taxation of their property income. It is an alternative to switching to furnished rentals, or even to setting up a company subject to corporate tax.
Cosse Law: Tax exemption with a social operation
What is the Cosse device?
Entered into force on February 1, 2017, the Cosse law was promulgated in order to encourage landlord owners to put their property, located in areas where demand for housing is high, for rent at an affordable price.
This device is intended to encourage rental to people with modest incomes. New and old goods (with or without work) are eligible for the scheme. However, only empty rented accommodation is concerned. The rented accommodation must be assigned to the tenant's main home and comply with an energy performance level.
To benefit from the tax advantage of this system, you must sign an agreement with the National Housing Agency (ANAH). The agreement can be concluded in a “very social”, “social” or “intermediate” rental sector.
Subsequently, you agree to rent your property for a period of six years (property without work) or nine years (property with subsidized work):
To households whose income does not exceed a certain ceiling, depending on the location of the property and the composition of the tax household.
For a maximum rent depending on the type of agreement and the geographical location of the property.
In exchange, you can apply a standard deduction.
The amount of the tax benefit varies depending on the location of the property under agreement. It can range from 15% to 70% of the amount of rents collected. The tax benefit consists of a deduction of this amount from the income of the owner-lessor. The tax deduction can be 85% if the owner entrusts the management of his property to an approved association (rental intermediation).
Investor Profile
The "Cosse" device is intended for owners who wish to rent out accommodation and who wish to limit the taxation of their property income. It is an alternative to switching to furnished rentals, or even to setting up a company subject to corporate tax.
The operation is relevant for:Taxpayers with high incomes. The higher the taxpayer's marginal tax bracket, the more effective the tax benefit;
The owners of premises that can be assigned to housing with or without work;
Investors in Malraux law to optimize the tax regime;
The owners of premises that can be assigned to housing in zone C.
Homeowners who have already benefited from tax advantages linked to the rental of bare buildings and who wish to extend them.
ANAH Convention
The National Housing Agency is a public establishment placed under the supervision of the ministries in charge of territorial cohesion and relations with local authorities, of Public Action and Accounts and of the Ministry of the Economy and Finances.
Anah thus encourages home renovation and rehabilitation work by granting financial aid to modest owner-occupiers and to fragile and struggling condominium associations.
It also offers private landlord owners a contract to facilitate the provision of a renovated rental stock at affordable rent.
The agreement is materialized by the signing of an agreement with the National Housing Agency.
The carrying out of subsidized work leads to an extension of the duration of the agreement from 6 years to 9 years
Conditions of eligibility
All accommodation located in France (mainland, overseas departments, etc.) is eligible for the "Cosse" scheme. They must be assigned to the tenant's main dwelling.
The accommodation can be new or old
The accommodation must be free from any fiscal commitment (Scellier, Pinel, Besson, De Robien, etc.). These devices must have come to an end. Only the Malraux diet is compatible with the "Cosse".
The accommodation can be located in all the geographical zones A, Abis, B1, B2, or C. For the rental supply, zone C is the least tight, unlike zones A and A bis.
The accommodation must meet the criteria of decency allowing the establishment of a main dwelling. That is to say, it must cumulatively:
meet tenants' health and physical safety obligations,
include the elements of equipment and comfort making it suitable for residential use,
have a minimum living area,
meet minimum energy performance conditions: protection against air infiltration, airtightness, sufficient ventilation and allowing air renewal and moisture evacuation
Works
The "Cosse" tax regime is applicable with or without work.
Improvement work is only required in zone C, in the absence of rental intermediation.
Elsewhere, the work is not compulsory, unless it is essential for the restoration of the property.
The work carried out may or may not be subsidized.
In the event of Anah subsidization, the signed agreement is independent of that of the "Cosse" tax system.
It provides for a rental and conservation commitment for the property under specific rental conditions.
Taxation
In zones A bis, A, B1, where there is a significant imbalance between supply and demand, the deduction amounts to:
30% of gross income for housing let under an interim rental agreement
70% of gross income, under a social or very social rent agreement
85% of gross income in the event of rental intermediation
In zone B2, the rates are:
15% of gross income from housing let under an interim rental agreement
50% of gross income, under a social or very social rent agreement
85% of gross income in the event of rental intermediation
In zone C:
50% of gross income, within the framework of a social or very social rent agreement, subject to the completion of improvement work
85% of gross income in the event of rental intermediation
Rental intermediation, which consists of entrusting one's property to a third party (real estate agency with a social vocation or approved body), for rental or management mandate, intended for households in precariousness, thus allows a tax deduction of 85%, which regardless of the area in which the accommodation is located.
Housing conditions
To benefit from the device, the accommodation cannot be rented to members of the tax household, ascendants or descendants of the owner or to a person already occupying the accommodation, except on the occasion of the renewal of the lease.
The resources of the tenant must not exceed a certain threshold depending on the composition of the household which also depends on the type of agreement made with the Anah.
The owner has the choice between 3 rent levels depending on the type of agreement he makes: intermediate, social, very social.
The “Affordable Rent” device, or Cosse device after the name of the Minister of Housing, operates on a principle well known to real estate investors: benefit from tax savings, in this case a tax deduction on land income, in exchange for a moderate rent.
This reduction can range from 15 to 70% of the rents collected. It is possible to go up to 85% for owners who will entrust the management of their property to an approved association.
To benefit from this tax exemption system, the owner must sign an agreement with the National Housing Agency (Anah): 6 years without work and 9 years if the owner is granted work aid and undertakes to rent his property for the entire duration of the agreement.
Advantageous for owners and affordable for tenants, the Cosse Act aims to combat the housing crisis which has been booming in recent years. It makes it possible to put private housing units back on the market, for moderate rents.
The deduction rate is set according to the location of the accommodation you are going to rent out, as well as the more or less social nature of the rent you have set:
Your property is located in zones A bis, A or B1, you will benefit from a deduction rate of 30% if you set an intermediate rent, 70% if you set a social or very social rent, and 85% if you set an intermediate rental rent.
Your property is located in zone B2, you will benefit from a deduction rate of 15% if you set an intermediate rent, 50% if you set a social or very social rent, and 85% if you set an intermediate rent rental.
Your property is located in zone C, you will benefit from a deduction rate of 85% if you set an intermediate rental rent.
The owner must respect a rent ceiling: this rent excluding charge / m² / month will be set as follows:
In the Abis zone, it may not exceed € 16.83 as an intermediate ceiling, € 11.77 as a social ceiling and € 9.16 as a very social ceiling.
In zone A, it may not exceed € 12.5 as an intermediate ceiling, € 9.06 as a social ceiling and € 7.05 as a very social ceiling.
In zone B1, it may not exceed € 10.07 as an intermediate ceiling, € 7.80 as a social ceiling and € 6.07 as a very social ceiling.
In zone B2, it may not exceed € 8.75 as an intermediate ceiling, € 7.49 as a social ceiling and € 5.82 as a very social ceiling.
In zone C, it may not exceed € 8.75 as an intermediate ceiling, € 6.95 as a social ceiling and € 5.40 as a very social ceiling.
Finally, the owner-lessor must commit to renting out his property to a modest household, which implies compliance with a specific limit on resources.
Advantages & Disadvantages of the Cosse Law
Cosse Law
Example of use of the Cosse device
1
Initial situation
Juliette and Clément want to invest in real estate in order to rent the accommodation they are going to buy to repay the loan and then benefit from additional income.
They have a 30% IMR and pay € 4,000 in income tax. They want to avoid paying more.
2
Investment in Cose
They decide to invest in Cosse l. They will set a rent of € 250 lower than the ceiling of € 8.08 / m2 for this area. At the same time, they enter into a contract with the Anah.
3
Final situation
As the apartment is located in zone B1, they are entitled to a reduction of 70% on their annual rents. Instead of taking into account € 3,000 in rent, they will declare € 900 during their tax return.
If they hadn't done anything: 30% on € 3,000 = € 900 in tax
With the "Cosse" device: 30% on 900 € = 270 € tax
They will also be subject to social security contributions.
