What is intermediate rental housing (LLI)?

❓ What is Intermediate Rental Housing (ILH)?

Intermediate rental housing (LLI) is a tax scheme aimed at encouraging rental investment in tense areas (zones A, A bis and B1).
Its objective: to promote the construction of controlled rental housing for households whose income slightly exceeds the social housing ceilings, but do not allow access to the free market.

⚖️ What are the advantages for investors?

The LLI offers several attractive tax advantages, notably for companies (SCI, SARL, SAS, etc.):
VAT reduced to 10% on the acquisition (instead of 20%);
Tax credit equivalent to the amount of property tax (for properties completed since 1 January 2023);
or temporary exemption from property tax for 20 years for housing completed before 2023.
💡 Note: since 2024, the device is also accessible to individuals, provided they invest via a company (and not directly).

👥 For which accommodations?

Are eligible:
New housing (VEFA, constructions, heavy renovations, or transformations of non-residential premises);
Service residences (students, seniors) under conditions;
The accommodations located:
in a tense area (A, A bis or B1),
in a reindustrialization zone or a territorial revitalization operation (ORT),
or in a major urban planning operation (GOU).

📜 Rental conditions

The accommodation must be rented:
as a main residence;
to a tenant whose resources respect the Pinel ceilings;
at a capped rent, equivalent to Pinel rents (with an increase for furnished housing).
➡️ Rentals can be nude or furnished.
It is even possible, through a family limited liability company, to cumulate LLI and LMNP status, in order to benefit from more flexible taxation (depreciation, higher rents, etc.).

💰 Example of a tax benefit

An SCI buys a dwelling eligible for the LLI for €200,000 excluding tax.

Thanks to the reduced VAT rate (10%), she saves €20,000 upon acquisition.

In addition, it benefits each year from a tax credit equivalent to the property tax, which improves its net profitability.

⚠️ Attention to the duration of commitment

The advantages of the LLI are conditioned on a long-term rental:

Any termination of the lease within the first 10 years results in the resumption of tax benefits (regularization of VAT and loss of exemption).

👨‍👩‍👧‍👦 And for the transmission?

Investing via a company (for example a family SCI) allows you to prepare the transfer of your assets without jeopardizing the tax advantages of the scheme.

The benefits are attached to the company, and not to its partners: the shares can therefore be freely transferred.

📘 Good to know

Intermediate rental housing (LLI) constitutes an interesting alternative to the Pinel and LMNP schemes, particularly for investors wishing:

diversify their investments,

benefit from advantageous taxation,

and contribute to the balance of the rental market in tense areas.