Tax exemption for honest people

Would you like to pay less tax in France? Who doesn't 😅 ? Good news: there is a way which, unlike not declaring your income, is completely legal when practised according to the rules... It is of course tax exemption!

Several investment vehicles, such as rental property and certain savings products, offer tax advantages and allow for a tax reduction. To benefit from this, the sine qua non condition is of course to declare them when you file your tax return!

Birdee helps you to find investment supports and tax exemption schemes. In addition to the interest, this is also a criterion to take into account when looking for a product to invest in!

WHAT ARE THE DIFFERENT WAYS OF DEFISCALISING INVESTMENTS TO REDUCE TAXES?

Regulated savings products

Investing in certain regulated savings products, such as the PEA (Plan Epargne Action), the PER (Plan Epargne Retraite) or the Livret A, can offer interesting tax advantages. 

- For example, the interest generated by your Livret A, LDDS (Livret de Développement Durable et Solidaire) and LEP (Livret d'Epargne Populaire) is exempt from income tax and social security deductions. 

- Gains generated by a share savings plan (PEA) are, after 5 years, exempt from income tax, but not from social security contributions. The condition for benefiting from these advantages? You must not have made a withdrawal before 5 years.

- The contributions paid into your PER are considered as expenses deductible from your taxable income, which means that you can benefit from a tax reduction up to a certain limit. It is not for nothing that the PER is a savings and tax exemption product appreciated by many French people.

- Please note: payments into your life insurance policy are not deductible from your income. 

To take advantage of the tax benefits linked to tax exemption, don't forget to enter all the small euros that have been paid into your PER on your tax return and in the appendices! Shortly before the start of the tax period in France (in April), the organisation that manages your savings or investments will send you a summary of the amount to be declared, known as the IFU (single tax form).

Pinel, a tax exemption scheme for rental property investment

The Pinel scheme is a property tax exemption scheme in France, which encourages investment in new collective housing, or housing in a future state of completion and located in an eligible area, in order to rent it out. It allows you to benefit from a tax reduction on the purchase price of a property. The Pinel scheme thus offers an interesting tax exemption solution for investors wishing to build up property assets, while benefiting from a tax reduction. In 2023 and 2024, the finance law has changed this rental investment scheme, which now comes in two forms: Pinel classique and Pinel +. The rate of tax reduction varies according to the form chosen.

Denormandie, another property tax exemption scheme

Thanks to the Denormandie scheme, a pure real estate tax reduction product made in France, you can benefit from a tax reduction by investing in a rental property located in an old, run-down district of a municipality eligible for the scheme. Other conditions for benefiting from this real estate scheme: carrying out energy improvement work (and respecting certain deadlines), investing between 28 March 2019 and 31 December 2025...

Invest in companies and save tax: YES WE CAN!

As an alternative to real estate, there are several investments in companies that allow you to save on tax and reduce your income tax, such as

- investment in SMEs via the Madelin scheme,
- investing your euros in local investment funds (FIP) or innovation investment funds (FCPI). 

It is also a way of combining business with pleasure by supporting the economy!