French Rental Investment: A Golden Opportunity Emerges as 2026 Tax Laws Take Shape
Paris, France – November 14, 2025 – A wave of potentially game-changing legislation is sweeping through the French Parliament, promising a significant boost to the rental investment market. While often overlooked, rental property is now at the center of crucial discussions surrounding the 2026 finance law, with measures poised to dramatically alter the landscape for investors. This is breaking news for anyone considering building a property portfolio in France, and a moment to seriously consider taking action.
Tax Breaks on the Horizon: Capital Gains & Gift Taxes Reduced
One of the most immediate benefits for current and prospective landlords is the proposed reduction in the ownership duration required to qualify for capital gains tax exemption. Currently at 22 years, this is set to be slashed to just 17 years. This seemingly small change unlocks significant flexibility for investors, allowing for more frequent portfolio adjustments and potentially higher returns. Furthermore, the extension of gift tax exemptions to include purchases of older properties – whether for the purchaser’s own use or for tenants – adds another layer of financial advantage. This is a particularly attractive option for families looking to transfer wealth and invest in the French property market simultaneously.
Wealth Tax Reimagined: Rental Property Reinstated as a ‘Productive Asset’
President Macron’s initial vision of a real estate wealth tax (impôt sur la fortune immobilière) aimed to discourage “sterile” asset holding. However, a crucial correction is expected from the Senate. Rental properties, initially included in the taxable base through last-minute amendments, are likely to be reclassified as “productive assets.” This is a major ideological victory, echoing the recommendations of the Daubresse-Cosson report commissioned to revitalize private rental investment. This shift acknowledges the vital role rental properties play in providing housing and stimulating the economy.
Depreciation Allowances: A Long-Awaited Incentive
For years, investors have called for the introduction of depreciation allowances for residential rental properties. While the government initially resisted, an amendment has been tabled, though currently limited to new construction and offering a modest depreciation rate. However, a fierce debate is underway, with parliamentarians pushing for a more comprehensive system – one that includes older properties – inspired by proposals from Senator Marc Philippe Daubresse and Deputy Mickaël Cosson. The outcome of this debate will be pivotal in determining the attractiveness of rental investment for years to come. This isn’t just about tax savings; it’s about recognizing the ongoing costs associated with maintaining a rental property and incentivizing long-term investment.
Don’t Overlook Intermediate Rental Housing (LLI)
Beyond these headline changes, the existing intermediate rental housing (Loueur en LMNP – LLI) scheme remains a valuable option. Investing in new housing rented at intermediate rates for at least 20 years grants access to a reduced 10% VAT and a tax credit equivalent to the property tax. While requiring the creation of a real estate company, the benefits can be substantial. This adds another tool to the investor’s arsenal, catering to a specific segment of the rental market.
Act Now: The Window of Opportunity is Open
The changes outlined above won’t come into effect until January 1, 2026, or potentially later depending on final legislative details. But that doesn’t mean you should wait. Now is the time to begin your search for the right property and secure financing. The coming months represent a critical window of opportunity to acquire a property and position yourself to take full advantage of these favorable new laws. The French property market, often perceived as complex, is about to become significantly more appealing for investors. Don’t miss out on this chance to build a secure and profitable future.
With borrowing rates starting from just 2.90% over 15 years, now is the perfect time to explore your options. Compare real estate loans and discover how we can help you navigate the French property market with confidence.
The French housing market, often a source of political contention, is unexpectedly becoming a point of consensus. As Minister Vincent Jeanbrun acknowledges the critical need for increased rental supply, these legislative changes signal a clear commitment to attracting investment and addressing the housing shortage. This isn’t just about numbers on a spreadsheet; it’s about building communities and providing homes for families across France.
