Denormandie: works of at least 25 % of the total cost

For the Denormandie tax reduction, the renovation work must represent at least 25% of the total cost of the project. This total cost includes the price of the property, its acquisition costs, and the renovation work. Only work invoiced by a company is eligible. The work must also fall under one of the eligible categories, be completed within a specified timeframe, and be supported by invoices.

This page deals with the conditions of the work. It does not cover the discount rates or price caps, which are addressed on another page. Nor does it provide the end date of the scheme: the official sources consulted do not agree on this point, which should be verified before making any commitment.

What the Denormandie scheme aims for

The scheme targets older properties undergoing improvement work, or premises previously used for purposes other than housing and converted into housing. They must be located in an eligible municipality (see below).

The 25 % threshold: how it is calculated

The rule can be summed up in one sentence: "The works must represent at least 25 % of the total cost of the operation" (public service).

The total cost of the operation corresponds to the cost price of the housing. The BOFiP (French Official Tax Bulletin) defines this as the purchase price of the premises, plus the costs related to the acquisition. The cost of the renovation work is added to this.

The calculation is therefore as follows:

works ≥ 25 % × (acquisition price + acquisition costs + works)

Calculated this means that the work must amount to at least one-third of the sum "price + acquisition costs" (this calculation is from this page; the source does not state it). The example from the BOFiP illustrates this: for a purchase of €120,000, including acquisition costs, the work to be carried out must be at least €40,000 including VAT, because (€120,000 + €40,000) × 25 % = €40,000.

The BOFiP provides a second example, for a property already improved before the sale: for a property acquired for €160,000, including acquisition costs, the improvement work carried out before the sale must amount to at least €40,000. This amount corresponds to 25 % of €160,000 (calculation on this page).

What works count?

These details come from the BOFiP. The commentary on work invoiced by a company and on materials is found in the 27/08/2020 version of BOI-IR-RICI-365-20; the 2024 version of this commentary could not be consulted.

Another point: the expenses for work taken into account for the reduction cannot be deducted from rental income.

The three types of work

The threshold of 25 % is not the only condition. Service-public lists three types of work:

What the BOFiP specifies regarding energy performance

The BOFiP (version of 28/03/2024, BOI-IR-RICI-365-10) details the energy performance requirement. It mentions two cumulative conditions:

• a conventional primary energy consumption after works "less than 331 kWh/m²/year"; ;
• and, either a reduction in consumption of at least 30 % for individual dwellings or 20 % for dwellings located in a collective residential building, or compliance with performance requirements on at least two of the five categories of work: roof insulation, insulation of walls facing the outside, insulation of glazed walls, heating systems, domestic hot water production.

The BOFiP (Official Bulletin of Public Finances) specifies, in this section dedicated to energy performance: "This provision does not apply to investments relating to housing located in Mayotte." The page does not elaborate further on the exact scope of this sentence.

One crucial point must be made clear: the way in which this threshold of 331 kWh/m²/year interacts with each of the three options listed by the public service, particularly with the creation of living space, is not addressed in the documents consulted. The specific requirements for each category of work are outlined in the decree of March 26, 2019, which is not reproduced on this page. Before signing, this point should be verified in the official text.

The deadlines

• Completion of the works They must be completed no later than December 31 of the second year following the acquisition. For example, in the case of a public service, an acquisition in February 2026 requires work to be completed no later than December 31, 2028.
• For rent : the accommodation must be rented unfurnished, as a main residence, no later than one year after the completion of the building or after its acquisition (public service).

Supporting documents

The terms of the work must be proven in writing.

• Company invoices invoices for work carried out, other than those for advance payments, are required. The BOFiP (Official Bulletin of Public Finances) indicates that these invoices must include the location and nature of the work, as well as the performance criteria stipulated by the decree of March 26, 2019.
• A summary note Details of the work carried out and its cost must be included with the income tax return. The economie.gouv.fr website indicates that this information should be attached along with a copy of the lease and the tenant's tax assessment notice.
• Documents justifying energy performance and invoices from companies, to be kept at the disposal of the administration.

The public service website specifies that, for energy efficiency work, using a RGE-certified professional (Recognized Environmental Guarantor) is "recommended." The page does not present it as a requirement.

Eligible municipalities

The accommodation must be located in one of the following municipalities:

• a municipality in the «Action cœur de ville» program; ;
• a municipality that has signed a territorial revitalization operation agreement (ORT); ;
• a municipality where the need for housing rehabilitation is particularly pronounced.

Since April 11, 2024, certain struggling co-owned properties are also targeted (economie.gouv.fr). The list of municipalities can be found in the appendix to the decree of March 26, 2019, which is not reproduced on this page: you should check your municipality before purchasing.

Numerical example (fictitious profile)

Situation. Marc and Sophie, a fictional couple, are considering buying an apartment in an eligible municipality. The price and acquisition costs amount to €160,000. Their renovation project represents €45,000 in expenses: €35,000 billed by a company, and €10,000 for materials that Marc plans to buy himself.

Issue. Has the threshold of 25 % been reached?

Strategy. Calculate the minimum amount of work billed, then compare it to what actually counts. Materials purchased by the taxpayer are excluded. Only the €35,000 billed by the company is considered.

Result.

Calculation assumptions: price and acquisition costs of €160,000; only the work invoiced by the company is included. The minimum amount of work invoiced for this price is €160,000 ÷ 3, or approximately €53,333 (€53,333.34 rounded up to the nearest cent). In the initial project, approximately €18,333 in invoiced work is missing. With a revised quote of €55,000 invoiced by the company, the 25.58 % share exceeds the threshold.

This profile is fictitious. The example only relates to the 25 % threshold. It says nothing about the amount of the reduction, nor about compliance with the other conditions (type of work, deadline, municipality).

What changes depending on your situation

• The property was purchased already improved before the sale : the BOFiP gives a separate calculation example (property acquired for €160,000, improvement work carried out before the sale worth at least €40,000).
• The type of work : energy performance, two types of work or new surface area. The relationship with the threshold of 331 kWh/m²/year needs to be verified, as indicated above.
• Your tax residence The 2026 income tax brochure indicates that individuals not domiciled in France can benefit from the Pinel or Denormandie tax reductions for investments made from January 1, 2019, onwards, provided they were domiciled in France on the date the investment was made. For those moving abroad, this condition must be verified before purchasing.
• The other devices : the same property cannot benefit from both the Pinel and the Denormandie schemes for older properties.
• The questioning The BOFiP (Official Bulletin of Public Finances) indicates that the rules for challenging the Pinel tax reduction apply to investments eligible for the Denormandie scheme for older properties. These rules are discussed on another page.

The rule depends on your situation. No results are guaranteed.