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Loc’avantages: you can submit your application!

Posted by Michel on May 3, 2022

As part of the reduction of inequalities and the fight against poor housing, the government is continuing its action by rewarding the efforts made by landlords. This year they can benefit from a new tax reduction scheme: Loc’avantages. 

Since 1er April 2022, it has been possible for any owner of empty accommodation to apply to the Agence nationale de l’habitat (Anah). Here is a closer look at the history, the principle and the conditions for benefiting from the measure.

Adapting an existing scheme

Loc’avantages is not a total innovation, but rather an adaptation of the Cosse “Rent Affordable” scheme, which seemed to show the limits of its effectiveness. While 154,000 landlords benefited from it in 2017, only 111,000 will do so in 2021. 

Let us recall that Renting Affordably consisted in granting tax benefits to landlords who agreed to reduce the amount of their rent. Since the beginning of 2017, it has been possible to obtain a deduction on property income, varying from 15% to 85% depending on the geographical area where the property is located, the level of rent and the way the property is managed. 

The government intends to replace the tax deduction with a tax reduction that is normally more advantageous and therefore attractive. Note that under the new scheme, the tax reduction is now the same for the whole of France and the thresholds are set by decree, as detailed below. 

What is the principle? 

Loc’avantages is betting on an incentive to practise a reasonable rent policy towards landlords who will benefit financially from a tax reduction. In simple terms, the lower the rent, the greater the tax reduction – within a certain limit, of course. 

The interest for owners is above all to facilitate the letting of their property: in a highly competitive market, a quality property offered at a reasonable rent will have every chance of finding a tenant and of renewing it if necessary. The gain is even twofold, since by giving themselves every chance of avoiding a rental vacancy, the owner protects himself from a dry financial loss when he probably has a loan to pay back. 

The aim of the scheme is to bring private rents closer to those charged in social housing and thus to fight against inequalities on the one hand, and to allow a growing number of households to avoid falling into housing insecurity on the other. This is a welcome idea at a time when everyone is concerned about purchasing power in the face of galloping inflation. 

Under what conditions can you benefit? 

In order to claim the benefits, it is necessary to justify the following points: 

  • Rent an empty property for at least 6 years;
  • The tenant must not be a family member of the landlord;
  • The property must be the tenant’s principal residence;
  • The accommodation must be rented under an agreement with Anah, in compliance with the rent and income ceilings for the tenant;
  • The rent must not exceed the ceilings set according to different brackets corresponding to different levels of tax reduction; 
  • Renting accommodation that is not a heat sink (F or G label on the energy performance diagnosis). 

Rent ceilings set by decree

On 1er April, a decree was published specifying the rent ceilings applicable under the Loc’avantages scheme. Three levels of tax reduction have been decided, depending on the level of the lowered rent, chosen by the owner between Loc1, Loc2 and Loc3 corresponding to the agreement signed with Anah: intermediate, social or very social.

These levels correspond to the rent adjusted downwards, according to the discounts applied after observing the market rent in the commune. To determine the reference rent for your property, Anah provides an online simulator. The discounts are always the same: 

  • Loc1: the rent is reduced by 15%;
  • Loc2: 30% decrease;
  • Loc3: 45% rent reduction.

A distinction is also made according to possible rental intermediation, which consists of the intervention of a third party (social real estate agency or state-approved association) between the owner and the tenant of the accommodation.

The tax reduction percentages are therefore as follows:

Level of rentsCorresponding tax reduction rate without rental intermediationTax reduction rates for rental intermediation
Loc115 %20 %
Loc235 %40 %
Loc365 %

The owner is therefore free to make his own calculations to determine his position in the grid and therefore the benefit he wishes to receive.

The calendar

It should be noted that the old scheme, Rent Affordable, remains in force for any agreement submitted to Anah before 1er March 2022. However, any lease signed after 1er last January and for which an Anah agreement is filed after 28 February is eligible. 

The online platform dedicated to the submission of applications has been open since 1er April 2022: any landlord can take the step provided, of course, that they are willing to play the game. 

Finally, the scheme is currently scheduled to remain in force at least until the end of 2024. However, it is likely to be reviewed or amended before then, so keep an eye on our news! 

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