As part of the Finance Bill for 2026, both the National Assembly and the Senate have approved the creation of a new status for private landlords, designed to encourage private individuals to invest in rental property. Although official adoption has not yet taken place, it seems highly likely, given the support shown by the government and parliamentarians. Applicable to investments made between 2026 and 2028, it offers significant annual tax depreciation (3.5 % to 6 %) subject to a long-term lease (minimum 12 years), rents capped at below-market levels, and a commitment to rent out the property free of charge in accordance with specific criteria. The scheme is designed to redirect private savings towards rental property, in response to the housing crisis and the gradual withdrawal of previous schemes. Legal column by Stéphanie Hamis, partner, Alice Bouchaudy, manager, and Hugo Cernettig, associate, from Arsene.

The housing crisis in France, characterised by a structural imbalance between sustained rental demand and declining private supply, has led the Government to rethink the tax incentives for rental investment. As it currently stands, the Finance Bill for 2026 therefore includes the creation of a new tax status for private landlords, designed to encourage private individuals to return properties to the traditional rental market.

Essentially, the scheme is based on an annual tax depreciation mechanism applied to the value of the property rented out. In practical terms, an individual who buys a property and lets it bare can deduct a proportion of the purchase price from taxable property income each year, at a rate that varies according to the type of property. In the latest version of the law, the rate of depreciation is set at[1] :

• 4% for homes purchased new or in a future state of completion. This rate is increased by 0.5, 1 or 2 percentage points for housing allocated for intermediate, social or very social rental respectively;
• 3.5 % for other housing, provided that the work carried out represents at least 20 % of the purchase value of the property. This rate is increased by 0.5 or 1 percentage point for housing allocated for social or very social renting respectively.

The scheme also stipulates that the cumulative depreciation applied to a property may not exceed the value of the purchase price plus the cost of any works, and the amount of tax benefit derived from the depreciation applied in respect of a year and a property may not exceed €10,000.

With this new scheme, lessors can significantly reduce their taxable property income, which, in the presence of high social security contributions and marginal tax rates, leads to substantial tax savings over the term of the rental commitment.

The key points of this scheme (which could also act as a major brake on its roll-out) are (i) the long-term commitment of the landlord and (ii) the commitment to charge rents below market levels. In order to benefit from depreciation, the property must be let for at least 12 years, at a rent that is capped and below local market levels. The aim of this condition is to direct the tax advantage towards sustainable and accessible rental property, by targeting affordable housing rather than purely speculative investments. Renting to relatives is excluded, and the property must be the tenant's principal residence.

However, the version of amendment no. 3196 adopted by the National Assembly on 15 January 2026 specifies that «.« the zoning of rent-free accommodation will have to be located in a high-tension area ». In principle, this would make it possible to depreciate a new property under the above conditions while charging a market rent, as long as the property is located in a prime location.

The taxation of rental investment has undergone a series of changes and withdrawals of incentives in recent years, most notably with the end of the Pinel scheme on 31 December 2024, which had structured part of the new-build investment market. This has led to a fall in new lettings, particularly of bare property, contributing to the severity of the housing crisis. Against this backdrop, the private lessor status is presented by its promoters as a mechanism that is more targeted at traditional private rental supply, responding both to the need to increase supply in quantitative terms and to improve its social quality.

However, not everyone is in favour of implementing this scheme. Some players in the industry consider it to be insufficiently ambitious or too restrictive, and believe above all that the conditions of access will not guarantee a significant boost to private rental investment. They point out that the complexity of the conditions (rent ceilings, minimum duration, renovation requirements for older properties) could dampen the appeal of this scheme at a time when other forms of property investment (notably non-professional furnished letting) continue to offer different advantages. 

The introduction of this private lessor status is a tax innovation in French law. By instituting tax depreciation applicable over a long period, the legislator is following an economic rationale: to direct private savings towards socially useful investments (the supply of bare housing), while at the same time placing constraints on this tax advantage to serve the general interest. 

In practice, investors will need to assess the precise scope of their rental commitments and ensure strict compliance with the applicable rent and income ceilings, which are generally based on those for intermediate or social housing. In addition, the scope of the amortisation, which will depend in particular on the category of property and its geographical location, will need to be incorporated into individual investors' asset management strategies, in conjunction with other existing tax schemes such as the LMNP scheme or the micro-foncier scheme for small landlords.

Finally, at this stage, the status of private lessor cannot be analysed as a definitive system. The Special Act 2026 passed and adopted unanimously on 23 December 2026 merely authorises the collection of existing taxes for 2026 and does not create any new tax arrangements.[2]. The private lessor regime therefore remains legally pending adoption as part of the Finance Act for 2026, the substantive examination of which resumes with the resumption of work in the Finance Committee of the National Assembly.

However, the political and parliamentary context makes it highly likely that this measure will be adopted. The debates must start from the latest Senate version, which explicitly includes the status of private lessor, and the government's desire to see this system included in the final text has been consistently expressed in both the Assembly and the Senate. This convergence between the executive and the two chambers strengthens the credibility of the scheme.

Under these conditions, without prejudging the formal outcome of the parliamentary shuttle, the status of private lessor already appears to be a key element of the future tax system for rental investment, which will replace the previous systems. It remains to be seen how effectively it will be used by investors, given its specific constraints.

[1] Rates as voted by the French Assembly's Finance Committee National in amendment n°CF635 adopted on 8 January 2026.

[2] The law The special agreement for 2026 includes only three articles: the first article concerns the authorisation of theThe second article guarantees the resources needed for local authorities to function properly, and the third article authorises the State to issue debt in order to ensure the continuity of its activities and public services.