“Robien” depreciation refocused and creation of the “Borloo populaire” scheme for new rental investment

Article 40 of the National Housing Commitment Act amends Article 31 of the General Tax Code. “Robien” depreciation moves from 8% of the price for five years then 2.5% for four years to 6% for seven years then 4% for two years (50% over nine years), and its extensions are abolished. A new scheme (“Borloo populaire”, art. 31 I 1° l) adds a flat 30% deduction from rents when rent and tenant income meet lower ceilings, plus extra depreciation of 2.5% per three-year period, for up to six years, after the letting commitment. These rules apply to homes bought new or whose construction starts from 1 September 2006; Decree No. 2006-1005 of 10 August 2006 sets the conditions.