Censi-Bouvard: what happens to the tax reduction for a property acquired before the end of the scheme?

The Censi-Bouvard scheme is closed to acquisitions made after December 31, 2022. For properties acquired before this date, the tax reduction continues to apply: a rate of 11% (%), capped at €300,000, with one-ninth reduction per year for nine years. In return, the commitment to rent the furnished property for nine years to the operator must be honored. Breaking this commitment, except in exceptional circumstances, adds the total reduction already obtained to the tax due for the year.

This page deals with the rules that continue to apply. It does not cover classified tourist residences (which have their own transitional rules), leaving France during the commitment period, the LMNP scheme without tax reduction (see another page on the site), or social security contributions.

What is closed, what continues

No zoning, rent ceilings, or occupant income limits apply.

The figures that still apply

• Rate: 11 %. The BOFiP (Official Bulletin of Public Finances) states: "the tax reduction rate is set at 11 %" since 01/01/2013. The impots.gouv.fr page gives 11 % for investments made from 2018 to 2022. A cell in its table also mentions "18 % under conditions", without any legible years or conditions: this page does not publish this rate.
• Basis: the cost price, up to a limit of €300,000 for the same tax year. Several dwellings fall within this overall limit.
• Spreading: one ninth per year. «"The tax reduction is spread over nine years, with one-ninth of its amount being deducted each year."»
• First year of imputation. For a newly built property, the year of acquisition. For a property purchased off-plan (VEFA), the year of completion.
• Surplus. If the fraction of the year exceeds the tax due, the balance is applied to the taxes of subsequent years, up to and including the sixth year, with the oldest fractions applied first.
• Overall cap. The government brochure lists the LMNP (furnished rental property) tax reduction ("art. 199 sexvicies") among the benefits included in the overall cap on tax advantages. The €10,000 cap applies to benefits related to investments made from 2013 onwards; the brochure provides other caps for earlier years (2011 and 2012 in particular): check the brochure if your acquisition was made before 2013.

The nine-year commitment: what must be kept

The owner agrees to "rent the furnished accommodation for a minimum period of nine years" to the operator. The nine-year period begins from the start of the initial lease for each unit.

• Effective and continuous rental. A vacancy of up to 12 months is only tolerated in listed cases of operator failure: judicial liquidation, termination or assignment of the commercial lease, termination clause for unpaid rent.
• New operator. After a change of operator, the accommodation should in principle be re-let within a month.
• Income in BIC (Business and Industrial Profits). They must be taxed under the category of "industrial and commercial profits" for the entire duration of the commitment. Taxation under another category is grounds for disqualification, without exception.
• Landlord status. If the activity is professional from the outset, the tax reduction is revoked. If you switch from non-professional to professional landlord during the commitment period, "the tax reduction is not revoked.".

The version of the BOFiP which details these conditions (BOI-IR-RICI-220-20) is displayed on 07/03/2019: reread it before making any decision.

Where this is declared

On form 2042 RICI (income 2025, tax return 2026), the section "Investments intended for non-professional furnished rental under the Censi-Bouvard scheme" contains:

• the box 7II : rental commitment, to be signed in the first year of the application; ;
• the boxes 7IK (residence for elderly or disabled people) and 7IL (student residence); ;
• The carry-over lines, with the instruction: "Carry over 1/9 of the tax reduction." Examples: 7SL for investments completed in 2024 and made from 2018 to 2022; ; 7SX for those completed in 2023 and carried out from 2017 to 2022.

The codes depend on the year of the form.

Reassessment: cases, amount, exceptions

The BOFiP (BOI-IR-RICI-220-50, version in force since 10/04/2015) includes among the cases of challenge: the absence of letting, letting after the deadline, an interruption too long, the use of the accommodation by its owner, a "transfer for valuable consideration" (sale), a transfer free of charge, a transfer of undivided rights, a "division of ownership", or a residence that does not meet the eligibility conditions.

Amount. If the commitment is not fulfilled during the period, the tax for the year of the event is increased by the total amount of the tax reduction obtained since the beginning. If the initial conditions were not met, the tax for the years in which the reduction was applied is increased by the amount of the reduction granted.

Exceptions. Regarding non-compliance with the rental commitment, the BOFiP (Official Bulletin of Public Finances) excludes the possibility of reassessment when the taxpayer:

1. is suffering from a disability corresponding to the second or third categories of Article L. 341-4 of the Social Security Code; ;
2. is subject to termination of his employment contract at the initiative of the employer; ;
3. deceased.

According to the BOFiP (Official Bulletin of Public Finances), these exceptions are extended to transfers for valuable consideration (sale) and the transfer of undivided rights. For transfers free of charge and the division of ownership rights, only the death of one member of the couple is considered. For other cases, including use of the dwelling by its owner and residences that do not meet the eligibility requirements, the BOFiP does not specify any exceptions.

Death. When the transfer of ownership results from the death of one member of a couple filing jointly, the tax reduction is not reclaimed. The surviving spouse "may request to reclaim the tax benefit for themselves.".

Retirement and divorce. Regarding termination of employment contracts, the BOFiP (Official Bulletin of Public Finances) refers to employees dismissed or retired by their employer; it does not mention retirement initiated by the taxpayer. For marriage, divorce, dissolution or entry into a civil partnership (PACS), and separation, the BOFiP BOI-IR-RICI-220-20 (paragraph 20, version posted on 07/03/2019) stipulates that the new taxpayer may request the continuation of the rental commitment; otherwise, the previously obtained tax reduction is revoked. These cases should be verified before taking action.

Depreciation and resale

• Depreciation. According to the BOFiP (version in effect since 04/03/2013), depreciation is only allowed on "the portion of the cost price of the buildings exceeding the amount used to calculate this tax reduction." For example, according to the BOFiP: for €350,000, only the portion exceeding €300,000 is depreciable.
• Capital gain on sale. Since the 2025 Finance Law (Article 84), depreciation deducted by a furnished rental property (LMNP) under the actual expense regime is included in the capital gains calculation, before the allowance for holding period. "This measure applies to sales carried out from February 15, 2025 onwards."«
• Exclusion. The government website indicates that certain properties located in serviced residences are exempt. It specifically mentions student residences, senior residences, and residences for people with disabilities. The exact conditions for this exclusion are not detailed on the website; they must be verified by obtaining the necessary documentation.

Censi-Bouvard after 2022: a numerical example (fictitious profile)

Situation. In 2022, Marc invested in two apartments in a student residence with services, scheduled for completion in 2024. The total cost was €340,000. He signed a nine-year commitment. Assumptions: his tax liability covers the entire portion of the investment each year, the overall tax cap is not reached, the sale takes place in 2029 without exception, and no portion of the investment is allocated to 2029.

Issue. What discount does he get, what portion of the price remains amortizable, and what would a sale cost in 2029, barring exceptions?

Strategy. Apply 11 % to the base capped at €300,000, divide by nine, then add the fractions obtained before the event.

Result.

Potential increases and the impact of the sale on capital gains are not addressed. This profile is fictitious and the amounts are hypothetical.

Censi-Bouvard after 2022: what changes depending on your situation

• Your structure Student residences, residences for the elderly or disabled, or classified tourist residences do not have the same rules.
• The investment and completion date : the carry-over boxes depend on it.
• A project involving sale, gift, divorce, leaving France, or retirement : these points need to be examined in conjunction with the texts before making a decision.

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