Interest payments on your primary residence are tax deductible in France

French tax residents can now deduct a portion of the annual interest payments on the loan for their primary residence from their income tax for five years. People who do not earn enough to pay income tax receive payments to reimburse part of their interest from the tax authorities.

Deductible for up to 5 years

These new tax credits apply to 40% of interest paid during the first year and 20% for the next four years. The eligible interest payments are capped at €7,500 for a couple and €3,750 for an individual, plus €500 for each dependent. This means maximum savings the first year of €3,000 for a couple or €1,500 for an individual, plus €200 per dependent.

Green building tax incentive

BBC certification offers special tax advantages. Homebuyers of a BBC-certified dwelling can deduct 40% of their annual interest payments for a period of seven years, with interest payments capped at €7,500 for a couple, plus €500 for each dependent. This represents a maximum savings of €23,800 over a seven-year period for a couple with two children.

Broader eligibility for tax advantages

All French residents who purchase their primary residence have been eligible for these tax advantages since May 6, 2007. What’s more, these tax credits are not limited to a single acquisition, which means you can continue to deduct interest if you sell your current home and purchase a new one with a new loan.