Intermediate rental housing (LLI)
Intermediate Rental Housing (LLI) is a real-estate investment scheme designed for legal entities (companies, social-housing bodies, institutional investors) that build or renovate dwellings rented to moderate-income households, subject to rent and income caps. It grants a reduced VAT rate of 10% at construction and, in certain cases, exemption from property tax for 20 years.
Key points
- Reserved for legal entities — not available to private individual investors in their own name.
- 10% VAT on acquisition or construction (vs. 20%) subject to prefectoral approval.
- Rent caps approximately 15-20% below market rents depending on the zone.
- Tenant income caps aligned with intermediate Pinel levels.
- 20-year property-tax exemption possible upon local-authority resolution.
Frequently asked questions
Why is LLI reserved for legal entities and not available to private individuals?
LLI aims to mobilize institutional capital at scale to produce affordable housing in tight-market areas. Legal entities — institutional investors, real-estate holding companies, SCI held by companies — can deliver investment volumes and long-term commitments that the private-individual market cannot structurally guarantee.
How does LLI differ from Pinel for a corporate investor?
Pinel (now closed to new acquisitions since end-2024) was available to individuals and relied on an income-tax reduction. LLI is exclusively for legal entities and is built around 10% reduced VAT and property-tax exemption, with no direct tax credit. Both schemes share similar rent and income caps.
What is the minimum commitment period under LLI?
The minimum tenancy commitment under LLI is 20 years, matching the duration of the property-tax exemption. This long horizon distinguishes LLI from shorter schemes like Pinel and makes it primarily suited to long-term asset-management strategies or institutional investment vehicles.
In practice
An institutional real-estate company acquires 30 new apartments in zone A bis under an LLI approval. It benefits from 10% VAT on the acquisition price (saving approximately €3M versus full VAT), a 20-year property-tax exemption granted by the municipality, and rents the units 18% below market to moderate-income households.
Official sources
- Tax credit for intermediate rental housing (BOI-IS-RICI-40-10) · BOFiP — impots.gouv.fr
- Housing and financing information · ANIL
- Mortgage credit (official guide) · Service-Public.gouv.fr