Intermediate rental housing (LLI) in France: 10% VAT

What is intermediate housing?

The Code de la construction et de l’habitation (Construction and Housing Code, art. L302-16) defines intermediate housing by three cumulative conditions, social rented housing being excluded:

1. it benefits from direct or indirect aid from the State or a local authority, subject to meeting the two following conditions for a minimum period;
2. it is intended as the main residence of people whose income does not exceed caps set by decree;
3. its purchase price or, when let, its rent does not exceed caps set by decree.

Service-public.gouv.fr describes it as a home “whose rents are capped and below market prices”, subject to income conditions. It therefore sits between social housing and the open market.

The tax regime: 10% VAT

A new home is sold with VAT at 20% in the general case. Intermediate housing qualifies for the 10% rate (service-public.gouv.fr). Article 279-0 bis A of the CGI sets out the cumulative conditions:

The current version of the article has been in force since 21 February 2026, following amendment by Law no. 2026-103 of 19 February 2026 (Légifrance).

2026 rent caps

Monthly caps per m², excluding service charges, for leases signed in mainland France (Article 199 novovicies, BOI-BAREME-000017, reproduced by service-public.gouv.fr):

According to service-public.gouv.fr, the cap varies with the floor area of the home (amount per m² multiplied by the number of m²) and may be reduced to reflect the particular features of local markets. In the overseas départements, it is €12.21 per m² in 2026.

2026 tenant income caps

Reference taxable income for 2024, lease signed in 2026, mainland France (service-public.gouv.fr):

Property tax: the 20-year exemption

For new homes completed before 1 January 2023 that benefited from the 10% VAT rate of Article 279-0 bis A and are let under its conditions, Article 1384-0 A of the CGI provides for an exemption from taxe foncière (property tax) for twenty years from the year following completion. The exemption is lost for all the homes in the development if the VAT advantage is called into question. This version of the article is in force until 1 January 2027 (Légifrance).

What about private individuals?

The 10% rate is reserved for legal entities: a private individual cannot directly buy a home on this basis (CGI, art. 279-0 bis A). Two doors remain open:

• as a tenant, if they meet the income caps above;
• as a landlord, through the Relance logement scheme, known as Jeanbrun, for an investment made between 21 February 2026 and 31 December 2028. Its “intermediate letting” tier uses the same rent and income caps. It allows a depreciation allowance of 3.5% a year for new homes and 3% for older homes with works, up to €8,000 a year per household, in return for a commitment to let unfurnished for 9 years (service-public.gouv.fr).

Which professional to consult

The agent immobilier (estate agent) managing a development or a letting checks compliance with the rent and income caps. The notaire (notary) checks the reduced-VAT conditions on the sale and draws up the deed. For an individual investing under Jeanbrun’s intermediate tier, the courtier en crédit (mortgage broker) arranges the financing.