Law Girardin (rental investment)

In order to promote the economic development of the overseas territories, the investment in the real estate for the private individuals is encouraged by the French State and is currently governed by the law Girardin of the July 21st 2003 (cgi, Article 199 undecies A), to replace the law Paul. This device is valid from July 21st, 2003 to December 31st, 2017. Any taxpayer domiciled on the French territory can benefit from this device of Défiscalisation, as main home in or rental investment.

The base of tax cut is the price of acquisition of the new housing or the price of subscription of the shares in the case of an acquisition in SCI. This base is equal to the multiplication of the livable space of housing in m2 (more 14 m2 of terrace) by an annually re-examined ceiling (2 025 in 2006,2 125 € including all taxes for 2007).

Base reduction = (Livable space + 14 m2 maximum covered terrace) X 2.125 €

Example: For a T3 of 70 m2 having a covered terrace of 15 m2 The base of reduction in 2007 = (70 + 14) X 2125 = 178.500 €

Law Girardin Dwelling

For what is used it?

The State set up this type of tax incentives in order to mitigate the rental deficiency, very strong in DOM-TOM.

Advantages tax

The taxpayer who carries out the acquisition of a new housing in the DOM-TOM can profit from a tax cut varying from 25 to 50% according to the cases, and which can even reach 64% pennies certain conditions:

In free hiring (not of ceilings of rents), the tax cut is of 40% of the purchase price of the acquisition spread out over 5 years, that is to say 8% per annum. The base of calculation of the saving in tax is reached a maximum with 2125 € TTC/m ² for 2007. The surface taken into account for that includes the floor timber (loggia) for a maximum surface of 14m ².

Example for our T3: Déficalisable amount = 178.500 X 40% = 71.400 € Annual reduction of tax = défiscalisable Amount/5 years = 71.400 €/5= 14280€

In intermediate hiring (obligation of ceilings of rents), the tax cut is of 50% of the purchase price of the acquisition spread out over 5 years, that is to say 10% per annum. The base of calculation of the saving in tax and the surface taken into account are the same ones as for the free hiring.

Example for our T3: Déficalisable amount = 178.500 X 50% = 89.250 € Annual reduction of tax = défiscalisable Amount/5 years = 89.250 €/5= 17850€

In the case of an affected housing with the principal residence of the taxpayer, the tax cut of 25% of the purchase price, is spread out over 10 years, at a rate of 10% per annum. The taxpayer must preserve his good as a main home during at least 5 years.

Example for our T3: Déficalisable amount = 178.500 X 25% = 44.625 € Annual reduction of tax = défiscalisable Amount/10 years = 44.625 €/10 = 4 462.5 €

These various rates are raised of 10 points when housing is located in an disadvantaged urban area and of 4 points when expenditure is carried out aiming to the production of renewable energies. The maximum tax cut can thus be 64% (50+10+4).

The tax cut is applicable as from the year of completion of good (DAT).

Conditions

The new housing located in the DOM-TOM must be rented naked as main home for one 6 years duration.

For the intermediate hiring, in order to facilitate the accession with the hiring:

the monthly rents for 2007 are reached a maximum during 6 years with 11,66€ except charge/m ² livable (more floor timber until 14m ²)
the annual resources of the tenants are reached a maximum with:

26.939 € for a single person
49.824 € for a couple without dependant
52.706 € for a couple with 1 dependant
55.588 € for a couple with 2 dependants
59.440 € for a couple with 3 dependants
63.291 € for a couple with 4 dependants

Industrial law Girardin

Thanks to a powerful tax engineering and with the selection of protected economic sectors, it is possible to gum its tax entirely each year and this whatever is the rising one. The State set up this type of tax incentives in order to stimulate the economic activity in the DOM-TOM.

How?

The law industrial Girardin allows, while becoming owner of industrial goods, to reduce your tax of 50% of the amount invested. The engagement of detention of these goods is 5 years (tiny room to 4 years for certain sectors) and of the counterparts with respect to the local company are to be respected.

Advantages

A tax cut of 50% (60% on TOM or certain sectors D `activity) over one year, calculated on the amount of productive investment HT.

If the amount of the tax cut exceeds the which had tax, exceeding it a credit constitutes on the State. This credit is used for the payment of the Income tax due under the 5 following years. The fraction not used is refunded with the expiry of this period.

This device is validated until 2017.

Conditions

Engagement of detention during 5 years (or normal duration of use if it is lower).

Retrocession of 50% of the tax incentive at the local company, in the form of a reduction in the rent or delivery price of the good.

See too

Desfiscalisation;

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