Are you hesitating to purchase a property affected by the Historical Monuments law? Discover the tax advantages you can benefit from if you acquire this type of classified property.
Since the Malraux Law, buyers of historical monuments who contribute to heritage preservation can enjoy several tax benefits. However, before taking advantage of this tax reduction, it's important to determine whether the property in question meets the criteria for the 2018 Historical Monuments tax exemption.
Which properties are affected by the Historical Monuments tax exemption law?
Several types of buildings are eligible:
- Buildings classified as historical monuments (national level)
- Buildings listed in the Supplementary Inventory of Historical Monuments (ISMH) (regional level)
- Buildings with a label granted by the Heritage Foundation (heritage interest)
This classification may sometimes only apply to part of the property (staircase, ceiling, tower of a château, etc.). In such cases, the allocation of charges will be limited to the work concerning only that part.
The many tax benefits of owning a historical monument
In general, buyers of classified properties have the opportunity to deduct the expenses related to their historical residence from their total income. However, the rules depend on the status of the property, particularly whether it generates income or not.
When the historical property does not generate any income
In this case, the owner can benefit from the following advantages:
- 50% deduction of expenses if the building is not open to the public
- 100% deduction of expenses if the building is listed in the Supplementary Inventory of Historical Monuments and is open to the public
If the deductible expenses result in an overall deficit, it cannot be carried forward to the following years.
When the historical property generates income
If the historical property is not occupied by its owner and is open to the public, it is possible to deduct the costs related to public visits from the revenue generated by those visits. Similarly, rental expenses can be deducted from the rental income.
If, when deducting these expenses, a property deficit is identified, it can then be deducted from the owner’s total income. Any surplus may be carried forward to the income earned in the following ten years.
If the historical property is occupied by its owner, income is then generated by visitation rights and/or partial rental. In this case, the deduction of expenses is the same as in the previously described situation.
The only difference concerns the surplus expenses, which can be fully deducted from total income but cannot be carried forward to future years.
Additionally, acquiring a property subject to the Historical Monuments law offers the possibility of an exemption from the Wealth Tax (ISF), provided the owner keeps the property for at least 15 years.
Are you looking to invest in prestigious properties to benefit from tax deductions? Contact the nearest Capifrance Prestige Consultant to your real estate project.
You can also check out our articles on the Malraux Law and tax reductions related to work on properties classified as historical monuments (MH).
