Denormandie, Malraux, Historic Monuments: French property tax relief in 2026

Quick answer. With the end of the Pinel scheme, French property tax relief in 2026 centres on the old-to-renovate market. Three schemes coexist: Denormandie (income-tax reduction of 12, 18 or 21 % on the cost retained within the dual cap of EUR 300,000 and EUR 5,500/sqm, works of at least 25 % of the cost, extended to 31 December 2027); the Malraux law (22 % or 30 % reduction on works capped at EUR 400,000 over 4 years, outside the tax-break cap); and Historic Monuments (deduction of works from total income, with no ceiling, subject to a 15-year holding commitment). The right choice depends mainly on your marginal tax rate and your appetite for renovation risk.

The Pinel scheme ended on 31 December 2024, with no large-scale equivalent for new-build. For anyone seeking to cut tax through property, attention shifts to the old-to-renovate market, backed by public policy to revitalise town centres and preserve heritage. We cover this shift in our article on the end of Pinel and its alternatives.

Three schemes structure this market, with very different logics. Denormandie is an accessible, capped tax reduction. Malraux targets heavy restoration in heritage districts, with an advantage outside the tax-break cap. Historic Monuments rely on a deduction rather than a reduction, with no ceiling but a long commitment. None is "best" in absolute terms: it all depends on your tax profile.

Designed as the extension of Pinel into existing housing, Denormandie grants an income-tax reduction when you buy a property to renovate, in certain municipalities, to let it unfurnished as a main residence.

• Rates and term. The reduction is 12 % for a 6-year letting commitment, 18 % for 9 years and 21 % for 12 years, spread linearly over the term.
• Base and ceilings. It applies to the cost price (land, works and acquisition fees), retained within the dual cap of EUR 300,000 per year and EUR 5,500/sqm of living area.
• Works. Works must represent at least 25 % of the total cost and improve the property's energy performance.
• Location. The property must lie in a municipality that has signed a territorial revitalisation agreement (ORT) or is eligible for the "Action cœur de ville" programme.
• Tenant. As with Pinel, rent and tenant-income ceilings apply.
• Timeline. The scheme was extended to 31 December 2027 by the 2026 Finance Act (Law no. 2026-103 of 19 February 2026).

Note: Denormandie falls within the overall EUR 10,000 cap on tax breaks. The annual reduction is therefore limited, making it a tool for middle-income taxpayers rather than very high earners.

The Malraux law (Article 199 tervicies of the French tax code) rewards the full restoration of buildings located in a Remarkable Heritage Site (SPR), under the supervision of the Architect of the Buildings of France. It is a demanding scheme, but powerful for high tax brackets.

• Rates. The reduction is 30 % of the works where the building is covered by an approved safeguarding and enhancement plan (PSMV), and 22 % where it falls under an approved architecture and heritage enhancement plan (PVAP), or where the restoration is declared to be in the public interest.
• Ceiling. Works are retained within the limit of EUR 400,000 over four consecutive years, i.e. a maximum reduction of EUR 120,000 over the period at the 30 % rate.
• Commitment. The owner commits to letting unfurnished for 9 years, within twelve months of completion.
• Key advantage. The Malraux reduction is excluded from the overall cap on tax breaks (Article 200-0 A): it counts neither against the EUR 10,000 cap nor the overseas cap. Any excess is carried forward for three years.

The scheme's extension to old degraded districts and urban-renewal districts ended on 31 December 2024. In 2026, entry is exclusively through Remarkable Heritage Sites.

The Historic Monuments regime (Article 156 bis of the French tax code) provides not a reduction but a deduction. This is an essential difference: the advantage is proportional to your marginal tax rate.

• Mechanism. The building's charges (restoration and maintenance works, loan interest) are set against property income; for a building generating no income and occupied by its owner, they are set against total income, with no ceiling.
• Outside the cap. This advantage is outside the cap on tax breaks, one of the last genuinely uncapped levers.
• Eligible properties. Buildings classified or listed as historic monuments, labelled by the Heritage Foundation, or approved.
• Commitment. Since 2009, the regime requires a commitment to hold the building for at least fifteen years from acquisition. A breach triggers a clawback of the advantage.

Given the deduction mechanism, this regime suits heavily taxed individuals (41 % or 45 % brackets) holding exceptional assets and a long horizon.

You already exceed the tax-break cap. If your other advantages reach EUR 10,000, Denormandie adds nothing: turn to Malraux or Historic Monuments, both outside the cap.

You target rental yield first. A tax scheme must never override the property's intrinsic quality (location, market rent, real condition). A tax advantage does not rescue a poor purchase.

You hesitate with the property deficit. For a standard renovation outside zoning, the property deficit is often simpler and just as effective.

You invest through a company. Depending on the structure, holding directly, via an SCI or in dismemberment changes the tax equation and the transfer; upfront framing is essential.

• Property quality beats the tax carrot. Check location, market rent and real condition before reasoning in terms of tax reduction.
• Works are the real risk. Overruns, delays and defects weigh more than the headline rate. Require detailed quotes, monitoring and guarantees.
• Denormandie zoning is strict. Outside an eligible municipality, no reduction: verify eligibility before signing.
• Malraux requires architectural approval. Works must be carried out under the supervision of the Architect of the Buildings of France.
• Historic Monuments commit you for 15 years. Holding is a strong constraint; early resale triggers a clawback.
• Plan the exit. Capital gains, taxation on resale and the property's liquidity must be considered from purchase.

Recently, a heavily taxed company director consulted us to cut tax through property. Drawn to a Malraux deal promising EUR 120,000 of reduction, he underestimated two points: the real duration of the restoration works and the modest rental yield once renovated. We re-examined the deal in the round, not just from a tax angle: full cost, works schedule, real market rent, and impact on his personal cash flow. Malraux remained relevant given his 45 % bracket and the advantage outside the cap, but only by securing the works and accepting a long horizon.

Our conviction, as accountants registered with the Ordre, is constant: a tax scheme only makes sense if it fits an overall wealth strategy. The tax advantage is an accelerator, never a reason to buy. That is why we always frame these deals within a director's wealth management, aligned with remuneration, taxation and succession.

Hayot Expertise advice. Before choosing, start from your marginal tax rate. Below 30 %, heavy tax relief has little point: a more liquid investment is often preferable. At 30 %, Denormandie offers a good simplicity-to-advantage ratio. At 41 % or 45 %, Malraux and Historic Monuments become relevant thanks to being outside the tax-break cap, provided you accept the works risk and the long horizon. Have the full deal costed, not just the tax reduction, and compare it with the property's real yield.