What do you want to know?
Why invest in the Censi-Bouvard law ?
The Censi-Bouvard system makes it possible to benefit, in the event of an investment before December 31, 2021, in accommodation located in a student residence or for the elderly or disabled, rented to the operator of the residence, from a reduction of tax equal to 11% of the cost price of the investment over 9 years.
This tax reduction is limited to € 300,000 investment per year.
Only buildings for residential use intended for furnished rentals (exercised on a non-professional basis) are eligible for the tax advantage.
In addition, it should be noted that:
The tax savings achieved thanks to the Censi-Bouvard law enter into the capping of tax loopholes at € 10,000.
The 20% VAT linked to this purchase is fully recoverable , provided the accommodation is kept for 20 years.
Housing income is therefore productive of taxable income for industrial and commercial profits (BIC).
the LMNP status can be combined with the Censi-Bouvard 2021 tax advantage. One does not prevent the other.
However, it is not possible to depreciate a property for which you have benefited from the Bouvard tax reduction.
It is possible for you to depreciate the fraction of the property greater than € 300,000 which has been taken into account for the calculation of the maximum tax reduction.
Note that furniture is depreciated and does not benefit from the Censi-Bouvard 2021 tax reduction.
Censi-Bouvard system: Cleverly tax exemption
How does the Censi-Bouvard system work?
The Censi-Bouvard law makes it possible to invest in new or renovated service residences. It confers certain advantages, such as tax exemption for rents generated by the investment, as well as a reduction in taxes.
The tax reduction is equal to 11% excluding tax of the acquisition or cost price over 9 years, limited to 300,000 euros of investment per year. For dwellings subject to rehabilitation work, the base is calculated taking into account the purchase price, increased by the amount of the work.
This amount is subject to the global ceiling for tax loopholes of 10,000 euros.
Note: if the tax reduction exceeds the tax due for the tax year, the balance can be set off against income tax due for the following years, within the limit of 6 years.
Eligibility for Censi-Bouvard
To be able to benefit from the Censi-Bouvard tax reduction and other tax advantages, the owner-lessor must meet certain commitments:
acquire a new property, in the future state of completion (VEFA) or completed for at least 15 years and rehabilitated in new condition
the accommodation must be part of a service residence (senior, student, medico-social establishments for the elderly or disabled)
rent for a minimum of 9 years to the operator of the structure via a commercial lease
rent out the property within 12 months of its acquisition or the date of completion of the work
rent the furnished property as a main residence and not be occupied by the owner or by a relative
be domiciled for tax purposes in France
Conditions relating to the beneficiary
Only taxpayers having the status of non-professional furnished rental company can benefit from this tax reduction.
Those who carry out the activity of renting a furnished apartment under the professional status at the time of the acquisition of housing are therefore excluded.
The investment must be made by the individual taxpayer, and not through a company.
Rental income should be taxed in the industrial and commercial profit category for the duration of the rental commitment.
To be eligible for the reduction, the accommodation must have been acquired for consideration.
Renters of professional furnished apartments cannot benefit from the Censi-Bouvard reduction.
Censi-Bouvard in LMNP
The LMNP allows you to become an owner, and to receive non-taxable monthly income, from rents of the residence.
However, the Censi-Bouvard law in LMNP cannot be combined with other laws allowing the tax exemption of this type of income. The classic LMNP also concerns service residences, and provides for the deduction of the amount of the investment over 30 years.
The Censi-Bouvard law does not allow this depreciation , but offers a reduction in income taxes, for a period of 9 renewable years. The legal texts of the LMNP and Censi-Bouvard allow all the recovery of VAT, or 20% of the amount of the investment.
VAT Censi-Bouvard
To recover the VAT on your investment, you must first check:
That 3 out of 4 services are provided in the residence, including breakfast, regular cleaning of the premises, the supply of household linen and the reception of customers
That the rents collected be subject to VAT
That the investor adopts the status of Lessor in Furnished Non-Professional (LMNP)
And that the rents collected be taxed in the category of Industrial and Commercial Profits (BIC)
Taxation
Multiple, the advantages of an investment in Censi-Bouvard are primarily fiscal:
Thanks to his investment, the taxpayer will be able to benefit from a tax reduction of 11% of the amount of housing spread over a period of 9 years for a maximum contribution of € 300,000 (excluding taxes and furniture) per year and per fiscal household. .
To this advantage is added the possibility of recovering the amount of VAT (at 20%), according to certain restrictive criteria.
Nature of eligible investments
Only certain operations are eligible:
the acquisition of new housing,
sales in the future state of completion (VEFA),
the acquisition of goods completed for at least 15 years:
which have undergone rehabilitation,
which are the subject of rehabilitation works.
Various points must be underlined within the framework of a Censi-Bouvatd device:
Regarding the tax reduction, it is 11%.
With a ceiling of € 300,000, or € 3,667 / year maximum. Beyond € 300,000, the purchaser can apply the amortization of the status of furnished rental company.
The reduction is calculated on the cost price of the accommodation excluding taxes. It is spread over 9 years and begins in the year of delivery of the residence. It can reach € 33,000 over nine years, or € 3,667 per year.
Concerning the deferral: if, one year, the tax reduction exceeds your income tax, the surplus can be carried forward for the following six years, provided that the accommodation is still rented in the year of use of the deferral of Reserve. The reduction enters into the ceiling for tax loopholes of € 10,000 / year.
Regarding VAT recovery : By purchasing an apartment in a Services Residence, you can recover VAT on your investment. You benefit from an immediate 20% discount on the price of your property. VAT is fully acquired after 20 years of ownership of the property. In the event of resale of your property between 5 and 20 years, the tax authorities can exempt you from the reversion of VAT if the purchaser rents the property under the same conditions.
Otherwise, the investor will have to reimburse the VAT in proportion to the remaining term. Secure rents, falling into the BIC category (Industrial and commercial profits)
Finally concerning the operator:
The professional operator is the sole guarantor of the attractiveness of the service residence (reception, maintenance, activities, services, etc.). It is up to him to ensure the rental management of your property and to ensure that it is occupied.
Your rental income is therefore fully secured for 10 years, the duration of the operating contract signed with the manager. You receive the rent due quarterly, regardless of the actual occupancy of your home.
The Censi-Bouvard Law 2021 allows French taxpayers who make a real estate investment in new buildings in a furnished residence to directly reduce their tax by a percentage of the cost of the apartment and to recover VAT on the amount of the investment. .
Censi-Bouvard is aimed at non-professional investors in equipped housing domiciled in France. To be able to take full advantage of this measure, the dwellings concerned are leased for 9 years in a service residence:
student apartments;
establishments for disabled seniors or adults;
certain long-term care complexes;
The purchase is made new or off-plan. An acquisition in the old can also be considered. In this case, it will have to be completely rehabilitated. In addition, a furnished apartment meets specific criteria legally defined. It presents the equipment necessary for a standard life use.
The advantages of the Censi-Bouvard device:
Regarding the tax reduction, it is 11%.
With a ceiling of € 300,000, or € 3,667 / year maximum. Beyond € 300,000, the purchaser can apply the amortization of the status of furnished rental company.
The reduction is calculated on the cost price of the accommodation excluding taxes. It is spread over 9 years and begins in the year of delivery of the residence. It can reach € 33,000 over nine years, or € 3,667 per year.
Another advantage: if, one year, the tax reduction exceeds your income tax, the surplus can be carried forward for the following six years, provided that the accommodation is still rented in the year of use of the carry forward. Reserve. The reduction enters into the ceiling for tax loopholes of € 10,000 / year.
VAT recovery By purchasing an apartment in a Services Residence, you can recover VAT on your investment. You benefit from an immediate 20% discount on the price of your property. VAT is fully acquired after 20 years of ownership of the property. In the event of resale of your property between 5 and 20 years, the tax authorities can exempt you from the reversion of VAT if the purchaser rents the property under the same conditions.
Otherwise, the investor will have to reimburse the VAT in proportion to the remaining term. Secure rents, falling into the BIC category (Industrial and commercial profits) Your rental income is fully secured for 10 years, duration of the operating contract signed with the manager. You receive the rent due quarterly, regardless of the actual occupancy of your home.
Advantages & Disadvantages of the Censi-Bouvard device
Censi-Bouvard acquisition
Example of investment in Censi-Bouvard
1
Initial situation
In order to benefit from a tax reduction and build up your assets, you decide to invest in a senior residence in Cannes. The accommodation is a new T3 of 40 m² sold for 210,000 €.
Rents are set at € 600 / month. Once furnished, the accommodation is fully eligible for the Censi-Bouvard law.
2
Investment via Censi-Bouvard
The services offered by the residence will allow you to recover VAT: the amount of VAT for this property is € 35,000.
The Censi-Bouvard system allows you to recover 11% of the price excluding tax of the real estate investment, ie 75,000 x 0.11 = € 19,250.
Thanks to the tax reduction and VAT recovery, the final cost of your investment is only € 155,750.
3
Abstract
In summary :
210,000 euros in the purchase of your property in senior serviced residences.
600 euros of income per month e
2,139 euros of tax reduction per year for 9 years
Recovery of VAT of € 35,000.
