Taxes can sometimes have a significant impact on taxpayers’ budgets. There are a few tricks to reduce your tax: make a donation, invest in real estate, employ an employee at home…here are some avenues to explore.
Employ a home-based employee to reduce taxes
Under certain conditions, the employment of an employee at home makes it possible to benefit from a tax credit. To take advantage of this tax benefit, home employment must be exercised in France in the main or secondary residence of the taxpayer by an employee who is directly employed by the individual or, indirectly, by an association, a company or a declared body.
The nature of home employment can be childcare, cleaning, gardening work, DIY work, beauty and body care, domestic services, hairdressing services, tutoring, ironing , preparing meals at home, etc.
The tax credit is equal to 50% of the amount of expenses incurred for the employment of an employee at home within the limit of 12,000 euros per year.
Investing in tax-exempt real estate
Various tax exemption schemes make it possible to acquire real estate while benefiting from a tax reduction. For example, the Pinel scheme consists of a tax reduction due to the acquisition of a new home, a home in the future state of completion, a home undergoing work of rehabilitation, of a dwelling that the taxpayer has built. The allocation of the tax reduction is conditional on the fact that:
The tenant’s resources do not exceed a certain ceiling.
Other devices allow you to reduce your tax by investing in real estate, this is particularly the case with:
The Malraux law which allows you to reduce your tax by investing in old and rehabilitated properties located on remarkable heritage sites. The tax reduction is equal to 30% of work expenses for buildings located within an area covered by a preservation and enhancement plan (PSMV) and 22% for buildings subject to a simple architecture and heritage enhancement plan (PVAP) or whose restoration has been declared of public utility. The tax authorities have set a ceiling on these expenses: 400,000 euros spread over 4 years.
The status of professional furnished rental company which offers advantageous taxation. Two possible regimes in the old: the micro-BIC or the real. In the first case, the rents benefit from a reduction of 50%. In the second, even more attractive, you will deduct all your charges: interest on the loan, work, property tax , not to mention the depreciation of premises and furniture. But if you prefer, you can opt for a tax reduction equal to 11% of the purchase price.
Buy a bare-ownership home
Goods purchased in bare ownership are not subject to the IFI if the usufruct is transferred to another person. This feature is the basis of the social rental usufruct (ULS), an arrangement used by institutional lessors of the HLM type. Initially, you buy the bare ownership of a dwelling from a specialized company (Perl, Cogedim, etc.), the usufruct being acquired by the social landlord who will manage the rental. This dismemberment can last fifteen to twenty years, a period during which you will not collect rent, therefore not pay tax.
Three advantages: you buy this property almost half the price since the usufruct escapes you, you are freed from all management concerns, and, at the end of the contract, you will recover your accommodation in full ownership, without costs or taxes. You can then occupy it, rent it or resell it.
Carry out energy saving works
The tax credit for energy transition allows you to deduct from your taxes part of the expenses incurred for carrying out energy renovation work. The benefit of the tax reduction is subject to the following conditions:
The work is carried out by an RGE certified company.
The work concerned may be: the acquisition and installation of a high energy performance boiler, the replacement of single-glazed windows with double-glazed windows, the acquisition of thermal insulation materials, the purchase and the installation of heating or domestic hot water production equipment operating with a renewable energy source (non-exhaustive list).
The amount of the tax credit is 30% of the amount of the expenses incurred. However, the amount of expenses is limited to:
Donate to reduce your tax
It is possible to reduce your tax by making a donation for the benefit of an organization of general interest or recognized as being of public utility. The amount of the tax deduction is 66% of the donation within the limit of 20% of the taxable income. Donations for the benefit of organizations helping people in difficulty also offer the possibility of reducing one’s tax (the Restos du Cœur, the Secours Populaire or the Abbé Pierre Foundation, etc.). The amount of the tax reduction is then:
