If you’re thinking of buying a luxury apartment or character building in a historic area, you need to be aware of the tax benefits offered by the Loi Malraux. This law aims to preserve France’s architectural heritage. It is governed by two fundamental criteria: location and type of building.
Protecting France’s post-war architectural heritage
Introduced on August 4, 1962, the Malraux Law was designed to combat the all-out construction of all kinds that became widespread in the 50s and 60s. For the first time, a genuine heritage preservation plan was implemented, dictated by strict urban planning regulations. Sarlat, symbol of the Périgord Noir, was the first town to benefit from the Loi Malraux.
Well-defined historical sectors
Buildings must be in a historic district that falls into one of the following categories:
- Savec sector: the district has a historic or aesthetic character that justifies restoration. It is generally located in dense city centers.
- AVAP in line with the Grenelle 2 timetable, replaced ZPPAUP in July 2015. The concept is broader than that of the safeguarded sector since the rules can also apply to spaces.
“Investing in private mansions, former hospitals, barracks…”
Work on the complete restoration of the building
The aim of the Malraux law is to bring historic sites back to life, while preserving them. That’s why the owner must commit to a complete restoration of the building that will allow the premises to be occupied. Expenditure will be on “heavy” repairs: exterior walls, demolition, roofing, conversion of accommodation, conversion of attic space, etc. Before starting work, the owner must apply for an ASP The work will then be carried out under the responsibility of the “Architecte des Bâtiments de France”, who will check that it is aesthetically pleasing and in line with the conservation plan.
Conditions for benefiting from the Malraux scheme.
To begin with, this is an investment in old stone. The owner will only be able to enjoy the property for 9 years. In the meantime, he or she is obliged to rent the apartment or mansion on an unfurnished basis.
Tax breaks that benefit the buyer
In return, the benefits are considerable. The tax reduction will be calculated on the amount of work carried out, at a rate of :
- 30% for buildings located in a conservation area.
- 22% for buildings in an Avap zone.
However, the amount is capped at €100,000 per year, and the operation can only be renewed three times. The amount of expenditure will be deducted from overall income tax.
Mercure Group Consulting
Buying a building with character or a prestigious apartment in a historic city center is a good real estate transaction, both for lovers of old stones and for investors. You should, however, seek the advice of a real estate specialist when it comes to administrative and tax procedures, which can prove complex.