Does your tax sheet make your hair stand on end every year? Know that there are, in France, completely legal solutions that will allow you to reduce tax effectively. They concern, among other things, real estate, investment funds and even wood! How to proceed to finally pay less taxes? We present here the different devices that offer it to you.
1- Real estate and tax exemption, with the Pinel law
The Pinel law, you are most certainly familiar with it. This device allows you to invest in rental property and pay less tax. The discount will be 12% if you agree to rent your property for a period of 6 years, 18% for a period of 9 years and 21% for a rental of 12 years.
However, to benefit from the famous Pinel law, it is essential to respect certain conditions, in particular an investment ceiling set at 300,000 euros, as well as a variable rent ceiling depending on the property and the region. In addition, not all areas are eligible for the Pinel scheme.
It should also be noted that if all types of housing are concerned (new or old), you will have to consider rehabilitation work in certain cases. Also, it is crucial to be well informed before embarking on a purchase.
2- Safeguarded sectors and the Malraux law: ideal for tax exemption
Let’s stay on the theme of real estate, with the Malraux law. This applies exclusively to owners of buildings located in protected areas or degraded districts. Aiming to preserve the French architectural heritage, the Malraux scheme helps owners carry out work to renovate a protected property, thus giving rise to tax reductions.
This represents 30% of expenses which have been committed within a saved zone, and 22% concerning the buildings located in the zones of protection of the urban and landscape architectural heritage.
Nevertheless, as for the Pinel law, the rental of a property in this type of sector must be for a minimum of 9 years.
3- Invest in a historical monument to reduce your taxes
Know that it is quite possible to take advantage of an interesting tax exemption by investing in one of the French historical monuments.
To be qualified as a historic monument, it must have specific approval from the tax authorities, or have the “heritage foundation” label. There are many of them and thanks to this purchase, you will be able to charge loan interest, in particular, to your overall income.
The amount of work here does not give rise to any ceiling, which is particularly interesting when you want to pay less tax. On the other hand, you will have to rent and keep the property in question for a period of 15 years.
4- LMNP: become the owner of a service residence with tax exemption
To reduce tax effectively, why not consider buying a property located in a service residence ? For example, a student residence, tourism, or even an EHPAD.
The non-professional furnished rental also grants you tax exemption, it represents 11% of the total amount invested, provided that the residence or apartment to which it belongs is new. In this case, you will benefit from the Censi-Bouvard law and like all real estate tax exemption schemes, the rental is taxed during a minimum of 9 years.
Moreover, in the same way as the Pinel law, the investment is capped at 300,000 euros.
5- Industrial investments and tax exemption
We are talking here about the Girardin law 2018, concerning investments in the industrial sector as well as in social housing in the DOM-TOMs. It is therefore a question of buying to rent an industrial property or a property intended for social housing.
Here, the tax reduction is particularly interesting, since it amounts to 50% of the amount invested. Only 5 years of rental are taxed, in order to take advantage of the tax exemption. Moreover, the property you are going to buy must correspond to the activity mentioned above (industrial or residential).
We have been interested so far in real estate tax exemption schemes which, in addition to significantly reducing your taxes, also allow the creation of your assets. However, other solutions than the purchase of real estate exist to reduce tax, we are talking to you about them now.
6- Investing in the timber industry to reduce tax, it is possible
An investment in the timber industry, and more particularly in a forestry group, is an effective method to optimize your income taxes. Moreover, in 2018, this device is even more interesting, because the deduction passes from 18% to 25%.
7- Discover the popular savings plan
The PEP, for popular savings plan, is a good way to build up capital and benefit from tax exemption. It is a question of placing money for the long term, which will be returned to you after a certain time in the form of a life annuity.
The PEP cannot exceed a total of payments of 92,000 euros, which does not include capitalized interest. In addition, the tax reduction is variable and depends on the marginal bracket to which you belong.
Life annuities are deductible from 10% of your professional income or, if the annual social security ceiling is greater than the sum of your income, 10% of this ceiling.
8- Invest in small and medium enterprises
Are you single and want to invest in an SME to benefit from tax exemption? In this case, your investment should not exceed 9,000 euros.
The ceiling set for couples is 18,000 euros and in all cases the reduction will be equal to 25% of your payments, if they are made in 2018.
9- Investment and investment funds to reduce tax
In 2018, it is possible to pay less tax by opting for a payment in a mutual fund for innovation, or in a local investment fund.
Again, a ceiling of 12,000 euros for a single person and 24,000 euros for a couple is retained, the tax exemption will be by 25%again for payments made in 2018. However, if you wish to invest in a local investment fund in Corsica, the tax reduction goes from 25 to 38%.
10- Pay less taxes by investing in cinema
Financing one of the finance companies of the film and audiovisual industry (or SOFICA), gives you the opportunity to pay less taxes, provided that they have invested 10% of their assets, or more, in a production company.
You can then consider a tax reduction equal to 48% of your payment.