The “déficit foncier” (property deficit) is a French tax mechanism that lets an investor deduct the cost of renovation works on a rental property from their property income and then from their overall taxable income, up to €10,700 per year (up to €21,400 for energy-efficiency works). It is one of the most effective levers for renovating an older rental property while reducing tax.
What is the déficit foncier?
A property deficit arises when the deductible expenses of an unfurnished rental (works, interest, management fees) exceed the rent received. This deficit is first offset against your other property income, then — for the part linked to works — against your overall income. It is a standard-law scheme, with no zoning or rent caps, that rewards the renovation of a rental property.
What is the tax benefit for investors?
The works portion of the deficit can be offset against overall income up to €10,700 per year, raised to €21,400 for energy-efficiency works (extended until 31 December 2027). Any surplus is carried forward: against overall income for 6 years, and against property income for 10 years.
- Works deducted at your marginal tax rate (the more heavily taxed you are, the stronger the effect).
- No zoning, no rent cap, no tenant income limits.
- Combinable with other property income; ideal for an older property to renovate.
Which works are deductible?
Under the actual-expenses regime, for an unfurnished let, repair, maintenance and improvement works are deductible (roof, electrics, plumbing, insulation, joinery, bringing up to standard, etc.). However, construction, reconstruction or extension works are not deductible. Correctly qualifying the works is therefore decisive.
The conditions to meet
- Rent the property unfurnished and fall under the actual-expenses regime for property income.
- Keep the property rented until 31 December of the 3rd year following the offset of the deficit.
- Keep proof of works (company invoices) and clearly separate deductible expenses.
- Properly qualify the nature of the works (repair/improvement vs reconstruction).
Genesius’s role in your project
The property deficit relies on genuinely eligible, well-documented renovation works. This is Genesius’s core business: we provide full project management of your rental renovation, with a detailed line-by-line quote and compliant invoices — a valuable asset to secure the deduction. See our offer on the Renovation and construction page.
We also support non-resident investors: remote management, reporting and end-to-end coordination.
Frequently asked questions about the déficit foncier
How much can you deduct with a déficit foncier?
The works portion of the deficit is offset against overall income up to €10,700 per year, raised to €21,400 for energy-efficiency works. Any surplus carries forward for 6 years (overall income) and 10 years (property income).
Which works qualify for the déficit foncier?
Repair, maintenance and improvement works on an unfurnished let. Construction, reconstruction or extension works are not deductible.
Is there a minimum rental period?
Yes: the property must remain rented unfurnished until 31 December of the 3rd year following the year the deficit is offset against overall income.
Does the déficit foncier count towards the cap on tax loopholes?
No. The property deficit is an income deduction, not a tax reduction: it is not subject to the €10,000 cap on tax loopholes.
Does Genesius handle the tax side?
No. Genesius carries out the works and project management, with compliant quotes and invoices. The tax treatment is validated by your adviser or accountant.
This article is provided for general information only and does not constitute tax advice. Amounts and conditions are subject to change; check your situation with a tax adviser or accountant.