The Sale of Property to be Renovated under the Malraux Law allows you to benefit from up to 30% tax reduction on the cost of restoring a property.
The VIR (Vente d’Immeuble à Rénover) tax relief scheme, governed by the Malraux Law, applies to the complete restoration of a building, which must be supervised by an Architect of the Buildings of France.
By investing under the Malraux Law, here are the tax reductions you may be eligible for:
- 30% for buildings located within a Safeguarding and Development Plan (PSMV), in Degraded Historic Districts (QAD), and in neighborhoods of the New National Urban Renewal Program (NPNRU).
- 22% for buildings located within an Architectural and Heritage Enhancement Plan (PVAP) or a program designated as of public utility.
However, to benefit from these tax advantages, you must rent out your property for at least 9 years.
The Sale of Property to be Renovated (VIR) at a Glance
This is a specific contract that resembles a traditional sale agreement. It is directly inspired by the off-plan property sale (VEFA).
The VIR law was created to protect future buyers, as the seller commits to completing all the renovation work (with a detailed description of the property and the renovations to be carried out) according to a work schedule set out in the sales contract, coupled with a financial completion guarantee. As the buyer, you will need to make payments as the renovation work progresses.
Upon signing the contract, the buyer immediately acquires ownership rights to the land and any existing structures.
The Contract for the Sale of Property to be Renovated (VIR)
This is a specific contract that resembles a traditional sale agreement. It is directly inspired by the off-plan property sale (VEFA).
The VIR law was created to protect future buyers, as the seller commits to completing all the renovation work (with a detailed description of the property and the renovations to be carried out) according to a work schedule set out in the sales contract, coupled with a financial completion guarantee. As the buyer, you will need to make payments as the renovation work progresses.
Upon signing the contract, the buyer immediately acquires ownership rights to the land and any existing structures.
Terms of the Contract for the Sale of Property to be Renovated (VIR)
The Sale of Property to be Renovated contract imposes several requirements at the time of signing.
The following points must be included:
- Detailed description and specific characteristics of the building or part of the building being sold.
- Description of the planned renovation work (both communal and private areas).
- Price of the property.
- Date and timeframe for the completion of the work.
- Proof provided by the seller of the financial guarantee for the completion of the work.
- Proof of liability and damage insurance for the renovation work provided by the seller.
Can You Generate a Capital Gain Through VIR?
Indeed, renovating a property increases its value. In a VIR under the Malraux Law, the acquisition price includes both the land cost and the renovation work. Acquisition fees, calculated on the total amount (land and renovation work), are added to the purchase price of the property.
If you're considering acquiring a property under the Malraux Law, get in touch with our Prestige Advisors who can offer you their expertise.
