1. Income tax: scale and tax brackets
Income tax is the best known and most widespread tax. Its principle is to tax income, profits and capital gains. This tax applies to all individuals, once the taxable income exceeds a certain threshold. It includes tax on income received by individuals in the household, reimbursement of social debt (CRDS) and the general social contribution (CSG).
2. The housing tax: gradual reduction
The housing tax is a tax relating to your accommodation. It is a local tax. It is determined according to the location of your main and secondary residences (if you have one) and your tax situation. It also varies depending on whether you have buildings and outbuildings. For example: a workshop, a private car park, a garage, etc.). These outbuildings will be taken into account in the calculation of your property tax, even if they are neither furnished nor attached to your accommodation.
3. Property tax
Like housing tax, property tax is a local and annual tax, which is based on your situation on January 1 of each year.
Its principle is to collect a tax on built and unbuilt properties of owners and usufructuaries. The amount of property tax is based on the value of the property (whether it is a building: house, apartment, building, or land) estimated to be rented. In other words, this corresponds to the annual rents that you would receive, if your property was rented.
4. Real estate wealth tax (IFI)
The real estate wealth tax was designed as a substitute for the Solidarity Tax on Wealth (ISF). It has been in force since 2018 and completely replaces the ISF, which is no longer used.
As its name suggests, the real estate wealth tax corresponds to real estate assets. To be taxable there, your property assets must have a net taxable value of more than 1.3 million euros . And this applies to the property owned by all the members who make up the tax household (person living alone or as a couple, as well as the property of minor children, if the parents have legal administration).
5. The different tax reduction strategies
These different taxes calculate the tax according to a base: income related to professional activity, property income, etc. There are therefore two main ways to reduce your taxes, whatever they may be:
6. How to reduce your taxes without investing?
Before thinking about finding tax reduction strategies , the first step is to make sure you are paying a fair tax! We have selected for you 5 reflexes to adopt to optimize the amount of your taxes, in relation to your situation. All this without any investment required!
7. The land deficit: declare your tax-deductible expenses
Concept: Owners who submit their property to bare rental can benefit from a mechanism called land deficit . The condition is to collect less revenue than the charges they have spent as an owner, and to adhere to the actual regime.
Note that the work mentioned above must be intended to repair or improve the property to be considered a deductible expense. If you carry out other types of work, you will need to find out if the amount of your work can be considered a deductible expense.
To know: You will have to indicate the deductible expenses when declaring your property income via form n°2044 . Do not forget to enclose proof of payment of these charges. And this, so that they are well taken into account.
8. The dismemberment of property: reduce the taxation of your real estate assets
Concept: The dismemberment of ownership lies in the fact of separating the full ownership of the property into two elements: the usufruct and the bare ownership .
The usufruct of a good is the right to use it and benefit from the income it generates. Bare ownership is simply the right to dispose of the property. So the right to sell it for example.
Benefit: The advantage resulting from the separation of ownership from the property is above all to be able to offload part of the value of the property. Indeed, an investor can quite buy a part of the dismemberment of property.