Loc'Avantages 2026: French tax reduction and rent caps

How the scheme works

Loc’Avantages, which succeeded the “Louer abordable” scheme, is based on a trade-off: you accept a reduced rent and low-income tenants, and the State grants you a tax reduction that is larger the lower the rent (France Rénov’, Anah).

To benefit, according to service-public.gouv.fr and the 2026 brochure:

• you are tax-domiciled in France;
• you sign a convention (agreement) with the Anah, the application for which is registered between 1 April 2022 and 31 December 2027;
• the agreement lasts at least 6 years, and the home must be let throughout; if the tenant leaves, you must re-let;
• the home, new or old, with or without works, is let unfurnished and is the tenant’s main residence;
• the tenant is not a member of your foyer fiscal (tax household), nor an ascendant or descendant, nor the sitting occupant except on renewal of the lease.

For the same home, the scheme cannot be combined with another tax incentive regime such as Pinel or Denormandie, and it does not apply to historic monuments.

The three rent levels and the reduction rates

You choose a level. The maximum rent is obtained by applying a discount to the market rent observed in the commune (municipality) (service-public.gouv.fr):

• Loc1, intermediate: −15%;
• Loc2, social: −30%;
• Loc3, very social: −45%, only with intermédiation locative.

The reduction is calculated on the gross income, that is the rent, from the home under the agreement. Its rate does not vary with the location of the home.

Example: a home let under Loc2 without an intermediary for €8,000 of annual rent gives entitlement to €8,000 × 35% = €2,800 of tax reduction for the year.

Intermédiation locative means entrusting the home to a socially oriented letting agency or an approved association, either under a letting/sub-letting arrangement or under a management mandate. For Loc2 or Loc3, France Rénov’ indicates a €1,000 bonus (letting/sub-letting) or €2,000 (management mandate), increased by €1,000 if the home is 40 m² or smaller.

The caps: rent, income and reduction

Rent cap: it is set by commune, and by arrondissement (district) in Paris, Lyon and Marseille. For a given home, the Anah multiplies the municipal cap by a floor-area coefficient equal to 0.7 + 19 / S, where S is the tax floor area, capped at 1.2: the smaller the home, the higher the cap per m² (Anah information pack). The exact cap for your commune is obtained with the Anah’s Loc’Avantages simulator, referred to by service-public.gouv.fr.

Income cap: the tenant’s income means the revenu fiscal de référence (reference taxable income) for the year before last preceding the signing of the lease (2026 brochure). It varies according to the level chosen, the household composition and the location, and is given by the same simulator.

Reduction cap: Loc’Avantages falls within the overall cap on tax advantages (Article 200-0 A of the CGI, the French General Tax Code, according to the 2026 brochure). France Rénov’ indicates that the reduction can reach “up to €10,000 a year at most”.

The required energy performance

The 2026 brochure specifies that in mainland France, for lettings entered into or renewed until 31 December 2027, the home must reach at least class E on the DPE (diagnostic de performance énergétique, energy performance certificate) (or, for an old DPE issued before 30 June 2021 that is still valid, consumption below 331 kWh/m²/year). Homes rated F and G are therefore excluded. From 1 January 2028, homes rated class E will be excluded too. The DPE must be valid when the agreement application is registered, when the lease is signed or when it is renewed.

Tax treatment and declaration

An often overlooked point: applying for Loc’Avantages excludes you from the micro-foncier (simplified flat-rate scheme for rental income) (2026 brochure, p. 158). Your rent is taxed under the régime réel (actual-expenses regime), on return 2044, with deduction of actual expenses; the Loc’Avantages reduction then comes off the tax.

The reduction applies from the date the agreement takes effect and throughout its term. When it expires, it can continue until the lease is renewed if the same tenant remains in place and the conditions are still met. In the first year, attach to your income tax return a copy of the signed agreement, a copy of the lease and the tenant’s or tenants’ tax notice for the year before last.

Which professional to consult

The diagnostiqueur (property surveyor) draws up the DPE that determines access to the scheme and identifies the works needed to move out of class F, G or E. An agent immobilier (estate agent) helps you place the local market rent against the Loc’Avantages cap and gauge the discount. If you are buying to let, the courtier en crédit (mortgage broker) costs the financing, and the notaire (notary) secures the purchase. For the agreement itself, contact the Anah or a France Rénov’ adviser.