Extension proposed for Denormandie tax reduction

The Denormandie tax reduction, a policy aimed at boosting investment in the renovation and rental of older properties, may be extended until December 31, 2030, if approved by Parliament. The original deadline was set for the end of 2027, but two amendments introduced by deputies Valérie Létard and François Jolivet during the review of the 2027 budget have proposed this delay.

How the tax reduction works

The tax reduction, introduced in 2019, allows individuals to reduce their income tax by investing in older properties that they renovate and rent out as primary residences. The tax benefit can be up to 300,000 euros, with rates of 12%, 18%, or 21% depending on the length of the rental commitment—6, 9, or 12 years, respectively.

Requirements for the renovation work

To qualify, the renovation work must account for at least 25% of the total cost of the project and meet at least one of three criteria: improving the property’s energy performance by at least 20% (or 30% for single-family homes), completing at least two types of work specified in the policy, or creating new habitable areas within the property.

Rental conditions and restrictions

The property must be rented unfurnished for 6, 9, or 12 years, depending on the chosen tax benefit. Rent and income limits vary by zone, with ceilings such as 19.71 euros per square meter in zone A bis and a maximum reference tax income of 36,144 euros for a single person in zone B1 for a lease signed in 2026.

Future of the policy and its scope

The extension of the Denormandie measure is still pending, as the amendments passed in committee must now go through the full parliamentary review of the 2027 budget. The policy complements the Jeanbrun measure from 2026, which focuses on collective housing, by also applying to single-family homes, which make up a large portion of older housing stock in medium-sized cities and town centers. The maximum tax reduction available under the measure is up to 63,000 euros.