The 7 effective solutions to reduce your taxes and invest your money in 20224 min read
1. REAL ESTATE TAX EXEMPTION
The real estate tax exemption schemes are a set of legal schemes giving the opportunity to investors, French taxpayers, to benefit from a tax reduction. Various devices exist allowing tax exemption in the new as in the old, with bare or furnished housing. Also, be aware that you can obtain a deduction from your income of up to €10,700 if you own a rental property and you have to undertake certain works (insulation, change of the heating system, windows, etc.). There are therefore several solutions: the Pinel law , the Denormandie law , the Malraux law , the Cosse law, the Censi-Bouvard law , the Historic Monuments Act , … each corresponding to a particular taxpayer profile. Do not hesitate to contact our experts so that they can advise you best according to your situation.
2. CARRY OUT WORK IN YOUR MAIN RESIDENCE
If you are not an owner-lessor, but you do own your main residence, you can also claim a tax reduction if you ever have to undertake improvement work. Several forms of work can be taken into account, such as: all work that impacts the environment and therefore sustainable development and energy saving (insulation, heating system, etc.) as well as assistance to people elderly or physically disabled.
3. INVEST IN FCPIS OR FIPS
The same type of system exists in favor of investment in mutual funds for innovation (FCPI) or local investment funds ( FIP ), which are intended to finance the development of companies that do not are not listed.
Regarding FCPIs , taxpayers can expect a tax reduction of 18% of payments made with a ceiling of €12,000 for a single person or €24,000 for a couple.
Be careful, if the shares are not kept for at least 5 years, you lose the tax advantage and will even have to repay the tax reduction you have obtained.
4. THE PEA
Today, when we talk about tax exemption, we are necessarily talking about the stock savings plan , the PEA is a real essential tool for diversifying your investments and reducing your taxes . It therefore makes it possible to invest on the stock market while being exempt on the capital gains realized after five years of holding the account. The main thing being the date of opening the account, you are not required to fund it regularly and you can pay into it up to a maximum of €150,000.
5. LIFE INSURANCE
After investment in stone, it remains the number one investment in the hearts of the French, it is life insurance . And for good reason ! It is an investment that benefits from many advantages but also from a great flexibility of use. Its more than attractive tax system makes it a great tool for tax exemption and paying less tax .
Indeed, throughout the life of your life insurance policy, capitalized income and interest are tax exempt . Investors can therefore take full advantage of their investment during the 8 years of ownership. Because yes, the holding period is decisive when placing your money on a life insurance contract. At the end of the eight years, all the withdrawals or redemptions that you will make on the contract will be exempt from taxes. On the other hand, the first four years, they will be taxed at 35% then at 15% between five and eight years.
Another important point, the tax allowance allowing you to escape the taxation of capital gains realized on the contracts. Count 4,600 € for a single person and 9,200 € for a couple. Of course, you will only be able to take advantage of this reduction after eight years.
Entering into force on October 1, 2019, the retirement savings plan (PER) is a new form of savings plan intended to facilitate management by encompassing all other retirement savings products, such as PERCO, the Madelin law or still the PERP, while offering advantageous taxation. The PER was designed to encourage the French to save for retirement while saving tax.
7. THE PER
The PERP (People’s Retirement Savings Plan), ancestor of the PER, is a common savings product accessible to all. Not only does it make it possible to prepare for retirement by providing an exit nest egg that will provide additional income, but it also allows contributions to be deducted from taxable income. Attention, within the limit of 10% of the net professional income received. Another advantage not to be overlooked: social security contributions are not borne during the period of constitution of the savings and the sums paid into a PERP are not retained for the calculation of the taxable heritage at the IFI, the tax on real estate wealth.