Loc’Avantages, the new tax reduction for landlords who rent cheaper

Loc’Avantages, a tax reduction granted in the event of the rental of your property at a price below the market Ministry in charge of Housing

Loc’Avantages, new name for the Affordable Rent system since 1is January 2022, offers lessors a tax reduction which increases according to the reduction in rent granted.

The Loc’Advantages system, which came into force on 1is January 2022, allows lessors to benefit from a tax reduction ranging from 15 to 65%, if they rent out their property at a price below market rents.

Big drop in rent, big tax cut

The idea pursued being to mobilize more housing for rent for middle-class or low-income households, the more the effort made on the rent by the owner will be important, the higher will be the tax reduction.

To benefit from the device, the property must be rented unfurnished for at least 6 years, to a tenant whose income is modest, as a main residence, for an amount of rent below the market, after having signed an agreement with the ‘Anah (National Housing Agency).

The owner must choose between three levels of rent defined by regulation and corresponding to the market of the municipality where the property is located:

  • “Loc 1”: market rent -15% to obtain a tax reduction of 15% and 20% with rental intermediation
  • “Loc 2”: market rent -30% to obtain a tax reduction of 35% and 40% with rental intermediation
  • “Loc 3”: market rent -45% to obtain a tax reduction of 65%, only in rental intermediation.

Rental intermediation consists of the intervention of a third party between the owner and the tenant.
This third party may be a social real estate agency with which the owner signs a management mandate similar to that of a traditional agency. The lease is then in the name of the tenant and the agency provides rental management of the property.
This third party may also be an association approved by the State. In this case, the accommodation is rented to the association which sublets it to a household with modest incomes, while guaranteeing the payment of rents and charges.

Renovation grants and aid

As soon as the owner concludes an agreement at a rent level or with rental intermediation, a bonus of €1,000 is paid to him. This amount is increased to €2,000 in the event of a management mandate and an increase of €1,000 is allocated in addition for small surfaces less than or equal to 40 m2.

Donors can also receive financial aid to carry out projects works and renovate the property rented out for a minimum of 6 years. They go up to €28,000 for a major renovation and up to €15,000 for a energy renovation.

Retroactivity to January 1

Leases signed since 1is January 2022 can benefit from the tax reduction, even if the online platform for submitting files to Anah will only open on 1is next April. In the event of a lease already signed, the request for agreement must be made before 1is May 2022 for leases signed before 1is March and within two months for leases signed after 1is mars 2022.

As for the old device Affordable Rent, it applies to agreement requests submitted until February 28, 2022. The extension of old agreements remains possible.

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