Denormandie tax scheme
An extension of the Pinel mechanism to buy-to-let investment in older properties with renovation works, targeting run-down town centres in eligible municipalities. The investor must carry out works representing at least 25% of the total project cost and comply with rent and tenant income caps. The tax reduction follows the same rates as Pinel. The broker verifies the municipality's eligibility and incorporates the works budget into the financing plan.
Key points
- Reserved for eligible municipalities on the official list, often under the Action Cœur de Ville programme.
- Renovation works must represent at least 25% of the total cost of acquisition plus works.
- Same rent and tenant income caps as the Pinel scheme.
- The broker checks municipal eligibility before building the financing plan.
Frequently asked questions
Why choose Denormandie over Pinel+ for a buy-to-let investment?
Denormandie targets older property requiring renovation, typically cheaper to buy than new-build, which can improve yield if renovation costs are controlled. It also suits investors who prefer established town centres over new-build schemes on the outskirts.
How does the broker incorporate renovation works into the Denormandie financing plan?
The broker consolidates the purchase price and works budget into a single mortgage or arranges a separate renovation loan. They ensure the contractor quote reaches the required 25% threshold and that invoices will be available to substantiate the tax benefit.
Which municipalities are eligible for the Denormandie scheme?
Eligibility is defined by decree and mainly covers towns included in the Action Cœur de Ville programme as well as municipalities that have signed a territorial revitalisation agreement. The list changes, and the broker recommends checking with the DGFiP before committing.
In practice
An investor buys an old flat in an eligible town for €100,000 and carries out €40,000 of renovation works, 28% of the total cost. The operation qualifies for Denormandie, and the tax reduction is calculated on a base of €140,000.
Official sources
- Denormandie rental investment (tax reduction) · Service-Public.gouv.fr
- Housing and financing information · ANIL
- Mortgage credit (official guide) · Service-Public.gouv.fr