Malraux Law: Tax Relief on Listed Heritage Buildings

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Buying an apartment in Old Nice that is listed as a historic monument appeals to you, but the cost of the renovation works holds you back? The Malraux law offers a powerful tax answer, with up to 30% income tax relief on restoration works, within a ceiling of €400,000 spread over 4 consecutive years.

In Nice, the protected heritage area covers the entire heart of the old town. The team at Winter Immobilier walks you through how the Malraux law works, the precise conditions to respect and the concrete opportunities it opens for a landlord or an investor buyer.

Key takeaways

• The Malraux law grants an income tax reduction of 22% or 30% on the restoration of a protected historic building.
• The eligible works are capped at €400,000 over 4 consecutive years, which means up to €120,000 of tax relief.
• The property must be let unfurnished as the tenant's main home, within 12 months of the works being completed and for 9 years.
• The works must restore the building in full, under the supervision of the Architecte des Bâtiments de France (the regional heritage architect).
• In Nice, Old Nice and Place Garibaldi qualify for the top rate thanks to the conservation plan approved in 1993.

The Malraux law, a tax scheme built to protect heritage

Introduced in 1962 on the initiative of André Malraux, then Minister of Culture, this law sets out to preserve the old building stock of historic town centres.

It encourages private owners to fund restoration works in exchange for a tax reduction applied directly to their income tax. The scheme is codified in article 199 tervicies of the French General Tax Code.

According to the official French tax bulletin (BOFIP), the reduction only applies to buildings located within strictly defined protected zones.

As the Winter Immobilier team likes to point out, « the Malraux law is first and foremost a heritage investment. The tax return is powerful, but it only kicks in if the restoration programme is run flawlessly, with the heritage architect involved at every stage. »

Eligible properties, works and sectors

3 pillars govern access to the scheme, namely the nature of the property, the type of works and the rental commitment. The tax authorities review each of these elements.

Eligible properties and sectors

Only residential buildings located in a protected zone qualify for the reduction. 3 perimeters are concerned, namely remarkable heritage sites (SPR) with a safeguarding plan (PSMV), SPR with a heritage enhancement plan (PVAP), and certain degraded old districts or NPNRU-classified areas. The French Ministry of Culture lists every site concerned.

The works taken into account

The works must lead to the complete restoration of the building, not merely a partial renovation. The tax authorities mainly accept 4 categories of expenditure :

• Repair and improvement works validated by the Architecte des Bâtiments de France.
• Works imposed by the public authority under the safeguarding plan.
• Works converting premises used for another purpose into housing.
• Membership fees paid to an urban land association.

The mandatory rental commitment

The owner lets the property unfurnished, as the tenant's main residence, for 9 consecutive years. The letting must begin within 12 months of the works being completed. Letting to a member of the owner's tax household is excluded.

What tax benefits for the investor owner?

The central strength of the scheme lies in its rate and in its treatment outside the cap.

The income tax reduction is set at 30% of the amount of works for buildings in an SPR with a PSMV, in a degraded old district or in an NPNRU area, and 22% for buildings in an SPR with a PVAP. The base is capped at €400,000 over a period of 4 consecutive years, which grants a maximum reduction of €120,000 or €88,000 depending on the sector.

A decisive advantage for high earners, the Malraux reduction does not fall within the global cap on tax loopholes set at €10,000 per year. It can therefore be combined with other schemes and property investment opportunities in Nice without any tax competition.

Good to know, if the reduction exceeds the tax due in a given year, the surplus can be carried forward over the following 3 years. This flexibility lets you absorb the tax benefit even when the works generate a reduction larger than the household's annual tax bill.

The Malraux law in Nice, a prime investment ground

In Nice, the Malraux law finds particularly favourable ground. Our team has been guiding investors across this perimeter for several decades.

The perimeter of the protected heritage site

Old Nice is one of the two protected sectors of the city. Its perimeter stretches from the sea to the Paillon, up to Place Garibaldi and the Port. The safeguarding and enhancement plan (PSMV) was approved there in 1993, opening the door to the top rate of 30% tax relief.

Typical property profile and points to watch

Eligible properties are mostly Haussmann-style buildings or 18th-century townhouses. For the landlord, the challenge lies in keeping control of the worksite and meeting the requirements of the heritage architect.

For the investor buyer, 2 points call for vigilance, namely the quality of the chosen programme and the timetable for offsetting the tax.

Would you like to invest in a protected building in Nice or have a property in Nice valued with a view to a Malraux operation? Winter Immobilier, established in Nice since 1958 and passed down over 3 generations, supports you across your entire project, from finding the property to following the worksite.

Contact our team to study your operation together!

FAQ - Malraux law

Does the Malraux law fall within the cap on tax loopholes?

No, the Malraux law escapes the global cap on tax loopholes set at €10,000 per year. This feature makes it especially attractive for heavily taxed taxpayers, who can combine it with other tax reductions without diluting the effect of each one.

Can you live in a property bought under the Malraux law yourself?

No, you cannot live in a property bought under the Malraux law. The scheme requires an unfurnished letting, as the tenant's main residence, for 9 consecutive years. Letting to a member of the investor's tax household, or to an ascendant or descendant, is also excluded.

How long is the mandatory rental commitment?

The rental commitment under the Malraux law runs for 9 consecutive years from the start of the letting. That letting must begin within 12 months of the works being completed. Any resale or breach of the commitment before this term triggers a clawback of the tax benefit granted.

Must the property be let furnished or unfurnished?

The property must be let unfurnished, without furniture, as the tenant's main residence. Furnished letting, seasonal letting and use as a second home are excluded from the scheme. This rule limits flexibility but secures the heritage purpose of the restoration.

Which districts of Nice qualify for the Malraux law?

The Nice districts eligible for the Malraux law sit within the perimeter of the protected heritage site, mainly Old Nice and the surroundings of Place Garibaldi. This perimeter benefits from a safeguarding and enhancement plan approved in 1993, which opens the door to the top rate of 30%.

Sources :

• Official French tax bulletin (BOFIP) : bofip.impots.gouv.fr/bofip/8771-PGP.html/identifiant=BOI-IR-RICI-200-30-20200227
• impots.gouv.fr : https://www.impots.gouv.fr/particulier/immeubles-speciaux-0