Choose the appropriate framework and structure before acquiring the property.
Real estate investment in French Guiana may benefit from several favourable tax mechanisms and, depending on the circumstances, provide a significant tax optimisation opportunity. Their effectiveness, however, depends closely on the nature and condition of the property, the intended letting arrangement and, above all, the structure chosen to carry out the investment.
The acquisition of an older property requiring rehabilitation, rental investment subject to controlled rents, ownership through a company, or certain investments in intermediate housing may therefore fall under very different tax regimes.
The schemes potentially available include, in particular, the Denormandie regime for older properties, certain mechanisms specific to the rehabilitation of housing in the French overseas territories, the Loc’Avantages schemeand, for certain transactions carried out by companies subject to corporate income tax, the incentives provided under the French Tax Code for overseas investment.
Alongside these specific regimes, a number of standard legal and tax tools may also be used: property income deficits, furnished letting, an SCI subject to income tax or corporate income tax, depreciation and split ownership, depending on the nature of the project and the objectives pursued.
The key issue is therefore not so much to identify an isolated tax incentive or to pursue tax savings at all costs, but to determine, before the acquisition,the most appropriate combination of the property, the planned works, the intended holding period, the letting method, the investment structure and the investor’s tax position.
Poor initial structuring can result in the loss of a tax advantage, unnecessary immobilisation of cash or increased costs of holding and subsequently selling the property. Conversely, a preliminary review can help secure the transaction and identify the tax mechanisms genuinely compatible with the contemplated project.
The Firm advises individual investors, executives and companies on the legal and tax aspects of their real estate projects in French Guiana, particularly in relation to the rehabilitation of older properties, rental investment, the choice between personal and corporate ownership, the taxation of rental income and structuring under either income tax or corporate income tax..
Are you considering investing or reducing your tax exposure in French Guiana? The choice of tax regime and investment vehicle should be made before the transaction, not afterwards.