Every household knows how to reduce its taxable income, for example by paying maintenance to an adult parent. But when it comes to making large investments, the task is more difficult. You must understand the mechanism of each investment medium before committing. Everything also depends on the ability of each individual to bear the risks that arise in certain cases. Among the French’s most popular investments are life insurance and the retirement savings plan (PER) on safe assets. In contrast to certain savings products, these are tax-protected. In addition to the administration fees, there is no withholding tax or surprise cancellation of the reduction.
Life insurance and PER: risk-free investments
With life insurance you can take out a variety of support services without paying a premium. There is no barrier to entry based on income. The reductions are fixed and constant, regardless of the relationships between the insured and the beneficiary. Established in 2019, the new PER offers capitalized pension support that can be adapted to everyone. It is more flexible than the old systems (Madelin, PERP, etc.) and allows contributions to be deducted from taxable income. What is even more uncertain is that the Local Investment Fund (FIP) and the Common Fund for Investment in Innovation (FCPI) enable investments in unlisted SMEs. Here, in return for capital risk, the investor benefits from a reduction of 25% on the investment amount (30% abroad).
Real Estate Investments: It’s Better to Be Knowledgeable
Real estate lovers will choose to invest in new properties. Thanks to the Pinel system (renewed in 2021), the state grants investors an IR reduction of 12% to 21%. In return, the investor undertakes to rent out his property in compliance with the rent and tenant limits. Another good plan is to invest in asset division, which consists of financing the mere ownership of a property subject to a temporary usufruct. This formula, which has been trendy for several years, enables the long-term accumulation of real estate assets. The tax deduction applies to all loans. What is less well known is investing in a property that is listed in the inventory of historical monuments. This solution enables significant tax relief over a period of one to four years. These are exclusively high-tax taxpayers. One disadvantage: pay attention to the solidity of the operator!