Denormandie scheme 2026: tax reduction and conditions

Where to invest: eligible communes and co-ownerships

According to service-public.gouv.fr, the home must be located:

• in a commune with a significant need for housing rehabilitation;
• in a commune awarded the Cœur de ville (town centre regeneration programme) label;
• in a commune that has signed an opération de revitalisation de territoire (ORT, territorial revitalisation operation) agreement;
• or, since 11 April 2024 according to the 2026 brochure, in a co-ownership in serious difficulty: placed under provisional administration, or included in an operation to rehabilitate run-down co-ownerships (ORCOD or ORCOD-IN).

Service-public.gouv.fr provides an official simulator to check whether a town qualifies for the scheme: Zone Denormandie.

The reduction covers the purchase of a home to be renovated, of a home already renovated by the seller, of premises to be converted into housing, or the subscription of shares in an SCPI (société civile de placement immobilier, property investment fund) (2026 brochure).

The works: the 25% rule

The improvement or conversion works, invoiced by a firm, must account for at least 25% of the total cost of the operation. This total cost means the purchase price, plus acquisition costs and the cost of the works (2026 brochure).

One of the following types of works must be carried out (service-public.gouv.fr):

• works improving energy performance by at least 20% (flat in a collective building) or 30% (individual house);
• at least 2 types of works from among: replacing the boiler, loft insulation, wall insulation, replacing the hot water system, window insulation;
• the creation of new living space.

The 2026 brochure adds that primary energy consumption after the works must be below 331 kWh/m²/year, evidenced by an energy assessment carried out by a diagnostiqueur (property surveyor) and by the firms’ invoices.

Deadline: the works must be completed by 31 December of the second year following the purchase at the latest. For a purchase in February 2026, the deadline is 31 December 2028.

Calculating the tax reduction

The reduction is calculated on the prix de revient (total cost price) of the home: purchase price, acquisition costs (notary, intermediaries, registration duties) and works (2026 brochure). This price is taken into account within two limits: €300,000 and €5,500 per m² of living space.

The initial commitment is for 6 or 9 years. It can then be extended in 3-year periods, up to 12 years in total: twice for a 6-year commitment (12% + 6% + 3%), once for a 9-year commitment (18% + 3%), i.e. 21% in both cases (2026 brochure, same rates as the Pinel scheme). The initial reduction is spread over 6 or 9 years depending on the period chosen; each extension top-up is set against tax in thirds over 3 years.

Example: a home bought for €150,000, costs included, and renovated by a firm for €50,000 has a cost price of €200,000, of which 25% is works. With a 9-year commitment, the reduction is €200,000 × 18% = €36,000, i.e. €4,000 a year for 9 years.

Three limits to bear in mind:

• the part of the reduction that exceeds the tax due in a given year is lost; it cannot be carried forward (2026 brochure);
• 2 homes at most per year, Pinel and Denormandie combined;
• the reduction falls within the overall cap on tax breaks (plafonnement global des niches fiscales).

Letting conditions

The home must be let unfurnished, as the tenant’s main residence, no later than 1 year after completion of the works or the purchase. The tenant cannot be a member of your foyer fiscal (tax household) (service-public.gouv.fr).

2026 monthly rent caps, per m², excluding service charges, in mainland France:

The zone only sets the caps: eligibility depends on the commune (see above), whatever its zone. The rent and income caps are those of the Pinel scheme (2026 brochure).

Tenant income caps (2024 revenu fiscal de référence, i.e. reference taxable income, lease signed in 2026) for a single person: €44,344 in zones A bis and A, €36,144 in B1, €32,530 in B2 and C; for a couple: €66,276, €48,268 and €43,439. Service-public.gouv.fr publishes the full scale according to the number of dependants, as well as the caps for the overseas territories.

How to claim

The reduction is claimed on the income tax return (form 2042 C and schedule 2042 RICI) for the year of the fait générateur (triggering event): completion of the works for a home bought to be renovated, the purchase for a home already renovated (2026 brochure). You must attach a summary note of the works carried out and their cost, in addition to the documents required for the Pinel scheme.

Which professional to consult

The diagnostiqueur (property surveyor) carries out the energy assessment before and after the works, required to evidence the gain in performance. The notaire (notary) itemises the acquisition costs included in the cost price. An agent immobilier (estate agent) knows the properties to renovate in eligible town centres and the market rent. The courtier en crédit (mortgage broker) can finance the purchase and the works in a single package.