Maximize Your Tax Benefits: Benefit from Reduced Transfer Taxes on the Purchase of a Furnished Apartment in Paris
Program:
1 . How to understand the transfer tax?
2 . Furnished rentals, an underexploited tax opportunity?
3 . What are the additional tax advantages of renting a furnished apartment?
When considering the purchase of a property in Paris, whether it is a primary residence, a rental investment or an acquisition on behalf of a company, the question of transfer taxes, commonly known as "notary fees", is unavoidable. These fees represent a significant portion of the total cost of acquisition and can vary greatly depending on the value of the property and its location.
However, there are some clever strategies to reduce these costs, especially when buying a furnished apartment for furnished rental. In this article, we will explore this tax opportunity in detail and the conditions that must be met to benefit from it.
How to understand the transfer tax?
Transfer taxes, commonly known as "notary fees", are fees charged when signing the deed of sale of a property. They represent a significant part of the costs associated with the acquisition of a property and are calculated as a percentage of the purchase price of the property. These fees include various taxes and remuneration, including registration fees, notary fees and various administrative costs.
In Paris, where property prices are among the highest in the country, transfer taxes can add up to a considerable sum. They usually vary between 7% and 8% of the purchase price of the property, depending on its value and location.
However, there are ways to reduce these costs, including investing in a furnished apartment intended for furnished rental. In some cases, the acquisition of a furnished property can be considered as an acquisition of a professional property, which allows you to benefit from reduced transfer taxes similar to those applied to traders and craftsmen. This tax opportunity can save investors a significant amount of money on acquisition costs, making investing in a furnished apartment even more attractive.
It is important to note, however, that the conditions for benefiting from reduced transfer tax may vary depending on the tax legislation in force and the specific circumstances of each transaction. It is therefore advisable to consult a tax expert or notary for personalized advice and to ensure that you meet all the requirements to benefit from this tax opportunity.
The purchase of a property by a professional
Investing in a furnished apartment intended for furnished rental offers several tax advantages that are often underestimated. Indeed, this type of investment can be considered as a professional activity, which allows you to benefit from certain advantageous tax regimes, including reduced transfer taxes.
To benefit from reduced transfer tax when buying a furnished apartment in Paris, certain conditions must be met. First of all, the apartment must be furnished and intended for furnished rental on a professional basis. This means that it should be rented out as part of a regular business activity, not for personal use.
Then, the investor must carry out a furnished rental activity on a professional basis, which implies making annual rental income above a certain threshold (currently 23,000 euros) and declaring it in the category of industrial and commercial profits (BIC).
First of all, the rental income received is taxed in the category of industrial and commercial profits (BIC), which allows you to benefit from an advantageous tax regime. This classification offers the possibility of depreciating the property and movable property over a set period of time, which can lead to a significant reduction in income tax.
In addition, rental management costs, such as condominium fees, maintenance and repair costs, as well as loan interest, can be deducted from rental income, further reducing the tax base.
In addition, for investments in furnished residences intended for seasonal rental or for people on business trips, it is possible to benefit from the micro-BIC regime, which offers an additional reduction in the tax burden by allowing you to benefit from a flat-rate allowance of 50% on gross rental income.
In summary, furnished rentals offer a favourable tax framework, with the possibility of depreciating property and furniture, deducting rental management fees and benefiting from flat-rate allowances on gross rental income, making it an attractive option for investors looking for optimised tax profitability.
- Investing in a furnished apartment in Paris offers reduced transfer taxes.
- Furnished rentals also allow you to depreciate the property and the furniture.
- Rental management fees can be deducted from rental income.
- A flat-rate allowance on gross rental income is possible with the micro-BIC scheme.
- Consult an expert to optimize your tax benefits.
You want to
to sell in Paris or its surroundings ?
Posted on 20/10/2021 by
Andy LECUYER
