Taxation: property income deficit

The property income deficit is little known among investors; it is a tax mechanism that allows you to offset part of your rental income against your taxes. One of its advantages is that this scheme is not included in the cap on the various tax breaks. Its effects on your tax assessment can be added to those of other tax incentive schemes.

As it is not subject to the cap on tax breaks, which is set at €10,000 per year, the property income deficit allows you to legally reduce your taxable rental income in a significant way. A property income deficit occurs when expenses exceed the rental income generated. For example, if the owner carries out work on their property and the cost of that work is higher than the income received, then this is a property income deficit.

The law allows the taxpayer, up to a limit of €10,700, to deduct this deficit from other income received (salary, etc.). If a surplus remains once this operation has been completed, the property income deficit can be carried forward for up to 10 years.