Deductions from your rental income (BIC, commercial income) of the following elements in order to eliminate the profits:
Refund of VAT
Your rental will be declared under the BIC (bénéfices industriels et commerciaux – industrial and commercial profits) system.
The BIC system is very advantageous for rental investments, because in addition to the deduction of all expenses related to your investment and the refund of the related VAT, BIC allows you to depreciate 85% of the value of your property investment and 100% of the furnishings (with no time limit).
Courtesy of this depreciation (a fictitious expense) reducing your BIC income from your apartment, you will pay little or no tax in the long term.
To date, this remains the ideal solution for establishing an additional income or a complementary tax exempt income once the loan has been repaid, as opposed to a standard rental investment, where once financed, the property will bring you income under the real estate system. However, this will then be heavily taxed at 15.5% of social deductions and included in your overall income and taxed at your marginal taxation rate.
Example of the effect of depreciation:
34 300 € for a marginal tax rate of 20%
51 450 € for a marginal tax rate of 30%
70 315 € for a marginal tax rate of 41%
77 175 € for a marginal tax rate of 45%