Owner Lessor: What can I deduct from my 2021 Annual Return?
The deadline for submitting your 2021 annual income tax return is approaching. With Century 21, take stock of the expenses and expenses deductible from your property income if you are a lessor owner of an unfurnished property (as opposed to a furnished property).
Depending on the amount of your annual income from a rental property, there are two different tax regimes:
If you receive less than 15,000 euros in rent excluding charges per year: "You are automatically subject to the micro-land regime, then you benefit from a flat rate allowance of 30%. No additional deductions may be made. Your property tax return is “simplified” and you must report the gross amount without abatement of your property tax on your income tax return (box 4BE)."
If your income from the rental of your property, excluding expenses, exceeds 15,000 euros per year: "You are subject to the real tax regime and you can thus deduct certain expenses and expenses inherent in the rented accommodation. The actual regime requires a specific declaration: declaration no. 2044. Even if you are eligible for micro-land, you can still opt for the real scheme (if your expenses exceed 30% of income, for example), but this option is then blocked for 3 years."
To be deductible, these charges must meet certain preconditions:
- "They must refer to the property providing you with land income"
- "They must be paid during the year"
- "You must be able to justify these expenses"
If you are an owner-lessor, a small amount of expenses to deduct from your annual income tax return:
"Management fees: remuneration of the concierge or caretaker, management and rental fees of the real estate professional if you entrust him with the administration of your property.
Repair, maintenance or improvement expenses: this includes expenses related to work to maintain or improve the property. If you are a DIY enthusiast, you can deduct the raw material used provided you have kept the supporting documents. Important: Construction, reconstruction and other expansions are not deductible from your property income.
Provisions for co-ownership charges: this deduction applies to lessors of co-ownership property. On the one hand you will have to deduct all the provisions of expenses paid and on the other hand you will have to reinstate the non-deductible expenses from the previous year.
Insurance premiums related to the leased property: loan insurance, non-occupying owner’s insurance, or unpaid rent insurance.
Interest on loans to finance the acquisition, construction, repair, improvement and conservation of the property in question.
Certain taxes: property tax for example, less TEOM or REOM if it is subject to a recoverable charge from your tenant.
Other management fees: the tax administration admits a flat fee of € 20 per year per room.
Expenses not paid by the tenant: these are expenses that normally should have been paid by the tenant but which have left the dwelling by leaving them at the expense of the owner.
The costs of proceedings: the costs (lawyer, bailiff, etc.) caused by a dispute with the tenant or a service provider involved in the accommodation."
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You want to benefit from the advice of trained and invested professionals to rent and/or manage your property, contact the Cabinet Lafage Transactions at 04 93 07 16 16.
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