Malraux Law in France: Tax Relief & Risks

In short

Malraux is an income-tax reduction of 22% or 30% of qualifying restoration expenses — not a deduction from taxable income, and not a percentage of the property price.
For new spending, it now applies in remarkable heritage sites (SPR) only: the routes for degraded old districts (QAD) and NPNRU neighbourhoods covered expenses paid up to 31 December 2024.
It is reserved for French tax residents, comes with a nine-year letting commitment, and does not make an overpriced property a sound investment.

What is the Malraux scheme?

Named after André Malraux, whose 1962 law created protected historic town centres, the scheme is now set out in article 199 tervicies of the French General Tax Code (CGI). It grants an income-tax reduction to owners who finance the complete restoration of a building located in a protected area, and who then let it.

The public-policy logic is clear: private savings pay for the restoration of heritage buildings that might otherwise deteriorate. In exchange, the investor accepts heritage constraints on the works, a letting commitment and a long horizon.

Who can claim it

French tax residents within the meaning of article 4 B of the CGI, owning directly, as partners of a company not subject to corporate tax (typically an SCI), or through a Malraux SCPI.
The rental income must be taxed as property income (revenus fonciers), which means unfurnished letting. A property held in a sole-trader business is excluded.
Non-residents are generally not eligible: owning a French property does not open the right to the reduction. The tax administration accepts a narrow exception for non-residents treated as residents under EU case law (so-called “Schumacker” non-residents), whose situation must be checked against the official criteria.
The reduction does not apply where ownership is split between usufruct and bare ownership (démembrement), including split ownership of SCI shares.

Which properties

Eligible premises include housing, premises originally intended for housing and returned to that use, premises used from the outset for another purpose, and — for permits or prior declarations filed from 1 January 2017 — premises converted into housing by the works.

Not the same as the historic-monuments regime

Buildings classified or registered as monuments historiques follow a separate regime, with its own conditions, in which certain charges and works are deducted from income rather than giving rise to a tax reduction. The two are frequently confused in marketing material. Malraux is a reduction on restoration expenses for buildings located in a protected area; the historic-monuments regime concerns the protected building itself.

Sources: CGI article 199 tervicies, version in force in 2026 (Légifrance) · impots.gouv.fr — Immeubles spéciaux (updated 8 April 2026) · BOFiP — BOI-IR-RICI-200-10 (scope)

Where the scheme applies in 2026

Malraux locations, conditions and rates

Location	Condition	Rate	New spending
SPR covered by an approved safeguarding plan (PSMV)	Complete restoration; works authorised under the plan	30%	Open
SPR covered by an approved heritage enhancement plan (PVAP)	Complete restoration; works authorised under the plan	22%	Open
SPR without an approved PSMV or PVAP	Restoration declared of public utility (DUP)	22%	Open
Degraded old district (QAD)	Restoration declared of public utility	30%	Expenses paid up to 31 December 2024 only
NPNRU neighbourhood with a high concentration of degraded housing	Restoration declared of public utility	30%	Expenses paid up to 31 December 2024 only

The SPR route applies to operations for which the building-permit application or prior declaration was filed from 9 July 2016. Whether a building lies inside the perimeter of an approved plan is a factual question, to be verified with the planning documents rather than with a brochure.

The end of the QAD and NPNRU routes concerns expenses paid after 31 December 2024. It does not cancel reductions correctly obtained on expenses paid before that date, provided the commitments are honoured. By contrast, a QAD or NPNRU operation presented today as giving a Malraux reduction on new spending deserves a written explanation.

Sources: CGI article 199 tervicies, version in force in 2026 (Légifrance) · impots.gouv.fr — Immeubles spéciaux (updated 8 April 2026)

How the tax reduction is calculated

A reduction of tax, not of taxable income

The Malraux benefit is subtracted from the income tax you owe. A 30% reduction on €100,000 of qualifying works reduces your tax by €30,000 — if you owe that much. It does not reduce your taxable income by €100,000, and it is not refundable.

What counts towards the base

The base is the qualifying restoration expenses actually paid to the contractors, including VAT, after deduction of any subsidies (such as those of the Anah). It covers certain ordinary property charges defined by reference to the property-income rules, membership fees of an urban restoration association (AFU), and the works imposed or authorised under the heritage rules — demolition, reconstruction of roofs or external walls, conversion into housing.

The purchase price of the building, the acquisition fees and loan interest are not part of the base. Under a VIR contract, the base is the price of the works to be carried out by the seller and actually paid by the buyer according to the contractual schedule.

The €400,000 ceiling over four years

For permits or prior declarations filed from 1 January 2017, qualifying expenses are retained within €400,000 per taxpayer over a four-year window: from the date the permit is granted (or the opposition period on the prior declaration expires) until 31 December of the third following year.
This is a total over the period, not an annual €100,000 limit. The annual €100,000 ceiling applied to permits or declarations filed up to 31 December 2016.
Works and Malraux SCPI subscriptions share the same ceiling. In joint ownership (indivision), it applies to each co-owner; in an SCI, to each partner’s share.
Expenses above the ceiling can neither be carried forward nor deducted from property income.

The theoretical maximum reduction is therefore €88,000 at 22% or €120,000 at 30% — only if €400,000 of works fully qualify, every condition is met and your income tax is high enough to absorb it.

Timing, carry-forward and the overall cap

The reduction is granted for the year in which the expenses are paid and applied to that year’s income tax. Calls for funds paid to the co-ownership manager count only when the works are actually paid to the contractors.
If it exceeds the tax due, the balance can be carried forward against income tax for the following three years. There is no refund and no carry-back.
The Malraux reduction is excluded from the overall €10,000 annual cap on tax benefits (article 200-0 A of the CGI). Its own €400,000 limit still applies.
Expenses that give rise to the reduction cannot also be deducted from property income: there is no double counting.

Direct ownership, SCI or Malraux SCPI

How the mode of holding changes the mechanics

Criterion	Direct ownership	SCI subject to income tax	Malraux SCPI
Base of the reduction	Qualifying works you pay	Your share of the qualifying works paid by the company	The part of your subscription allocated to qualifying works (the fund must allocate at least 65% of subscriptions to works)
Year the reduction is granted	Year the works are paid	Year the works are paid	Year of subscription
Letting commitment	You let for nine years	The company lets for nine years; partners keep their shares until the end	The fund lets for nine years; you keep your shares until the end of its commitment
Control	Choice of building, works, tenant and timing of sale	Shared between partners	None: decisions belong to the management company
Exit	Sale after the commitment, at market price	Depends on the partners and the company’s statutes	Usually the fund’s liquidation; the secondary market may be very limited

A Malraux SCPI is a tax-oriented fund. Its reduction is calculated on the part of the subscription allocated to qualifying works, not on the whole subscription, and its economics should not be compared with the distribution rate of a conventional property SCPI.

Sources: CGI article 199 tervicies, version in force in 2026 (Légifrance) · BOFiP — BOI-IR-RICI-200-30 (base and ceilings) · CGI article 200-0 A, overall cap on tax benefits (Légifrance)

Obligations and conditions

Complete restoration of the building, not the refurbishment of a single flat.
Authorised works: a building permit or prior declaration, with works imposed or authorised under the heritage rules of the site. In practice, the works are reviewed by the Architecte des Bâtiments de France.
Residential premises: let unfurnished, as the tenant’s main residence, for nine years, with the lease taking effect within twelve months of completion of the works.
Non-residential premises: let for nine years, with income taxed as property income. The main-residence requirement concerns housing; it is not applied mechanically to commercial or professional premises.
Tenant: not a member of your tax household, nor an ascendant or descendant — nor, for an SCI, a partner, a member of a partner’s tax household, or a partner’s ascendant or descendant. SCI partners must keep their shares until the end of the commitment.

Rents. Malraux has no scheme-specific rent or tenant-income ceilings, unlike the former Pinel scheme. That does not mean you can set any rent: rent-increase limits in “zone tendue” municipalities, rent caps in certain cities, and decency and energy-performance requirements still apply. See buy-to-let property in France: returns, taxation and risks for these general letting rules, and Pinel law in France: what it was and what existing investors should review for the closed Pinel scheme.

Sources: CGI article 199 tervicies, version in force in 2026 (Légifrance) · impots.gouv.fr — Immeubles spéciaux (updated 8 April 2026) · BOFiP — BOI-IR-RICI-200-10 (scope)

OptiFi’s expert view — when the tax benefit masks a poor investment

Malraux finances something genuinely useful, and some operations are sound. But the scheme’s design creates a specific risk: the larger the works budget relative to the building, the larger the tax figure — and the easier it becomes to present an expensive operation as attractive. Our approach, “Investir éclairé”, is to examine the property before the reduction.

What deserves scrutiny

Price after works, per square metre, against comparable restored and unrestored properties nearby. A VIR price includes the seller’s margin on both the building and the works.
Works cost and overruns. Heritage-controlled restoration is expensive, and overruns and delays are a recognised risk: check who bears them under the contract.
Time without rent. During the works, there is no rental income, while loan interest and charges keep running.
Net yield. Rent in line with the local market, minus co-ownership charges — often significant in historic buildings — insurance, property tax, management and maintenance.
Liquidity and resale. The buyer in ten or fifteen years will not receive your tax reduction. The price will be set by the market for that street, that building and that flat.
Concentration. A large amount committed to one building in one city.
The nine-year commitment, which limits your ability to sell or change the use of the property.
Financing. Rate, loan schedule and the gap between the first repayments and the first rent. Borrowing amplifies losses as well as gains.
Execution risk on the tax benefit. If works are not properly authorised, deadlines are missed or the letting starts late, the reduction can be lost or recaptured — while the price paid remains.
Your own tax capacity. If your income tax is too low, part of the reduction may expire unused after the three-year carry-forward.

Worked illustration: what a 30% reduction does — and does not — tell you

The 30% applies to the works, not to the whole investment: here, the reduction represents 18% of the €180,000 committed, before any fees.

Selling for €180,000 after 10 years

Gross sale proceeds equal to the original cost before fees are not a break-even. Acquisition fees, financing costs, the period without rent during the works, charges, maintenance, selling costs and ten years of inflation all sit outside the €180,000. Whether the operation created value depends on every dated cash flow — rents received, costs paid, tax reduction actually used and net sale proceeds after tax — not on a comparison between two headline figures.

Why the capital-gains tax cannot be calculated from these figures alone

The previous version of this page gave a precise capital-gains tax for this example. We have removed it: the result depends on information that the example does not contain, starting with the legal form of the purchase.

How the works may be treated at resale — it depends on the arrangement

Arrangement	Treatment of the restoration works for the capital gain
Sale of a building to be renovated (VIR)	CGI article 150 VB I includes the seller’s contractual works in the VIR acquisition price, and a first-instance judgment (TA Paris, 10 February 2025, no 2219466) applied this even where the works had given rise to the Malraux reduction. The tax administration stated a different interpretation in a 2019 answer to a Senate written question, so the treatment should be validated case by case, not assumed.
Purchase, then separate works contracts	Works can only be added to the acquisition price under the conditions of the capital-gains rules on construction and improvement expenses, which exclude expenses already taken into account for income tax. The treatment of Malraux works, and of any flat-rate allowance, must be checked case by case.
Malraux SCPI	The treatment follows how each building was acquired, not the vehicle alone. A fund may hold buildings bought under a VIR: a first-instance judgment (TA Paris, 10 February 2025) included the seller’s contractual works in their acquisition price, even though they had given rise to the Malraux reduction. The AMF’s 2015 warning describes a real exit risk, not a rule for every fund. A sale of buildings by the fund and a sale of your own units may follow different rules, and a taxable gain can arise in either case.

Sources: BOFiP — ACTU-2015-00231 (works under a VIR contract) · BOFiP — BOI-RFPI-PVI-20-10-20-10 (capital gains: acquisition price) · TA Paris, 10 Feb 2025, no 2219466 (first-instance judgment) · Sénat — Answer to written question no 01409 (Frassa), JO Sénat 10 January 2019 · AMF — AMF urges caution when investing in SCPI shares under the Malraux and Real Estate Loss regimes (12 November 2015)

A reliable estimate requires at least:

the purchase deed and whether it is a VIR contract;
the acquisition price, acquisition fees and the works invoices;
which works, if any, can be added to the acquisition price, and whether a flat-rate allowance applies;
the holding period, which determines the allowances for income tax and social contributions;
your tax residence at the time of the sale and any applicable tax treaty;
any surcharge on high capital gains, and the selling costs;
the mode of holding: directly, through an SCI or through an SCPI.

Timing and annualised returns

The cash effect of the reduction is not immediate: it depends on when the works are paid and when your income tax for each year is settled, and part of it may be carried forward. A euro of tax saved in year three is worth less than a euro spent in year zero. We show no internal rate of return here, because computing one requires the complete dated cash flows. Dividing the reduction by the holding period does not measure an annualised return.

Direct Malraux vs Malraux SCPI

Two different ways to use the same tax reduction

Criterion	Direct ownership (or family SCI)	Malraux SCPI
What you buy	A specific flat or building you can inspect	Shares in a fund restoring several buildings
Fees	Seller’s or developer’s margin, acquisition fees, management	Fund entry and management fees, on top of the works
Timing of the reduction	Spread over the years the works are paid	Granted for the year of subscription
Exit horizon	Your decision after nine years of letting, subject to the market	Liquidation of the fund, generally 13 to 15 years later according to the AMF (2015)

The AMF warning of November 2015 concerned tax-oriented SCPIs under the Malraux and déficit foncier regimes. The regulator noted that investors sometimes struggled to understand the tax treatment on liquidation, that documentation was short on detail, that marketing emphasised the entry benefit, and that liquidation generally occurred 13 to 15 years after subscription, with a taxable gain calculated from the purchase price prior to restoration.

That 2015 formulation is historical, not a rule that applies automatically to every Malraux SCPI. In a first-instance judgment of 10 February 2025 (TA Paris, no 2219466), concerning buildings acquired by Malraux SCPIs under VIR contracts, the Paris administrative court annulled a decision of the tax administration and held that the seller’s works included in the VIR price form part of the acquisition price, even though they had given rise to the Malraux reduction. The administration had taken the opposite position. A first-instance judgment does not bind other courts and does not settle every transaction: before estimating a gain, the acquisition contract and legal structure of each property should be analysed, with transaction-specific legal advice.

The AMF warning is not a ruling on direct Malraux ownership. Its lesson nonetheless applies to both: the exit deserves as much attention as the entry.

Our guide SCPI in France: a hands-off alternative to buy-to-let covers conventional property SCPIs, not tax-oriented Malraux SCPIs, whose fees, tax base and exit conditions differ.

Sources: AMF — AMF urges caution when investing in SCPI shares under the Malraux and Real Estate Loss regimes (12 November 2015) · AMF — Communiqué : appel à la vigilance sur les offres de SCPI Malraux et déficit foncier (November 2015, French) · TA Paris, 10 Feb 2025, no 2219466 (first-instance judgment) · CGI article 199 tervicies, version in force in 2026 (Légifrance)

Who may consider Malraux — and who should avoid it

It may be relevant for

French tax residents with a substantial income tax every year, able to use the reduction including the carry-forward;
investors with a long horizon: the works, nine years of letting, then the time needed to sell;
buyers convinced of the value of the specific building and of rental demand, independently of the tax benefit;
budgets able to absorb overruns and periods without rent;
situations where the property fits within diversified wealth.

It is generally unsuitable for

short horizons or anyone who may need the capital back;
non-residents expecting a French tax benefit, outside the narrow exception described above;
taxpayers whose income tax is too low to use the reduction;
wealth already concentrated in property;
heavy borrowing relative to income;
any purchase driven primarily by the tax figure.

Questions to ask before buying

Is the building in an SPR covered by an approved PSMV or PVAP, or has the restoration been declared of public utility — and which rate applies? Ask for the documents.
What share of the total price is qualifying works, and how was that split determined?
What is the total price per square metre after works, compared with restored properties nearby?
Who bears overruns and delays, and what guarantees cover completion?
When are the works expected to be completed, and what rent and demand can realistically be expected for a letting that must start within twelve months?
Is it a VIR contract or a purchase with separate works, and what does that mean for taxation at resale?
Will your income tax over the coming years absorb the reduction, including the carry-forward?
What happens if you need to sell before nine years — and who will buy at the end?

Sources and references

Official and judicial primary sources, in French unless stated otherwise, consulted in October 2026.

CGI article 199 tervicies, version in force in 2026 (Légifrance) — Legal basis: French tax residence, eligible sites, the 31 December 2024 end of the QAD and NPNRU routes, eligible works, €400,000 ceiling, carry-forward, nine-year letting, SCPI rules and recapture.
impots.gouv.fr — Immeubles spéciaux (updated 8 April 2026) — Official summary of the Malraux scheme and of the separate historic-monuments regime.
BOFiP — BOI-IR-RICI-200 (9 April 2026) — Official tax-administration commentary on the Malraux scheme (overview).
BOFiP — BOI-IR-RICI-200-10 (scope) — Eligible taxpayers, including the “Schumacker” non-resident exception, properties and operations.
BOFiP — BOI-IR-RICI-200-30 (base and ceilings) — Base of the reduction, €400,000 ceiling for permits filed from 2017, historical €100,000 annual ceiling, carry-forward and exclusion from the overall cap.
BOFiP — ACTU-2015-00231 (works under a VIR contract) — Works carried out by the seller under a vente d’immeuble à rénover form part of the acquisition price.
BOFiP — BOI-RFPI-PVI-20-10-20-10 (capital gains: acquisition price) — Definition of the acquisition price used to compute a real-estate capital gain.
CGI article 200-0 A, overall cap on tax benefits (Légifrance) — The Malraux reduction is outside the overall annual cap on tax benefits.
AMF — AMF urges caution when investing in SCPI shares under the Malraux and Real Estate Loss regimes (12 November 2015) — Historical warning specific to tax-oriented Malraux and déficit foncier SCPIs: liquidation, exit taxation and documentation.
AMF — Communiqué : appel à la vigilance sur les offres de SCPI Malraux et déficit foncier (November 2015, French) — Original French version of the AMF release.
TA Paris, 10 Feb 2025, no 2219466 (first-instance judgment) — Judicial primary source, full text published by the administrative courts (open data). Malraux SCPIs’ buildings acquired under VIR contracts: the seller’s works included in the VIR price form part of the acquisition price for the capital gain, even where they gave rise to the Malraux reduction. Annuls a decision of the tax administration; first-instance decision.
Sénat — Answer to written question no 01409 (Frassa), JO Sénat 10 January 2019 — Ministerial answer stating the tax administration’s interpretation: works under a VIR that gave rise to the Malraux reduction cannot be included in the acquisition price for the capital gain. Not binding on the courts.

Professional commentary (not an official source)

CNAF (notaries’ professional body) — PVI et prix des travaux prévu dans le contrat de vente d’immeuble à rénover (27 February 2025) — Professional commentary on the TA Paris judgment, including the tax administration’s earlier contrary position. Not an official source.

Frequently asked questions

Is the Malraux scheme still available in 2026?

Yes, for the complete restoration of a building located in a remarkable heritage site (site patrimonial remarquable, SPR): at 30% where the site is covered by an approved safeguarding plan (PSMV), and at 22% where it is covered by an approved heritage enhancement plan (PVAP) or, failing that, where the restoration has been declared of public utility. The routes for degraded old districts (QAD) and NPNRU neighbourhoods only cover expenses paid up to 31 December 2024.

Is Malraux a tax deduction or a tax credit?

Neither. It is an income-tax reduction (réduction d’impôt): it is subtracted from the income tax you owe, not from your taxable income. It is not refundable. If it exceeds the tax due for the year, the balance can be carried forward against income tax for the following three years.

How much tax can the Malraux scheme save?

The reduction is 22% or 30% of qualifying restoration expenses, retained within €400,000 per taxpayer over a four-year period. The theoretical maximum is therefore €88,000 or €120,000 — only if €400,000 of works fully qualify, every condition is met and your income tax is high enough to use it.

Can a non-resident of France benefit from Malraux?

Generally not. The reduction is reserved for taxpayers domiciled in France for tax purposes; owning a French property is not enough. The tax administration accepts a narrow exception for non-residents treated as residents under EU case law (so-called “Schumacker” non-residents), whose situation must be checked against the official criteria.

Does Malraux count towards the €10,000 cap on tax benefits?

No. The Malraux reduction is excluded from the overall annual cap on tax benefits. It remains subject to its own limit of €400,000 of qualifying expenses over four years.

Are there rent ceilings with Malraux?

There are no Malraux-specific rent or tenant-income ceilings, unlike the former Pinel scheme. The general rules still apply: rent-increase limits in “zone tendue” municipalities, rent caps in certain cities, and decency and energy-performance requirements. Residential premises must be let unfurnished, as the tenant’s main residence, for nine years.

What happens if I sell before the end of the nine-year commitment?

Breaking the letting commitment, or selling before it ends, generally triggers the recapture of the reduction obtained, in the year of the breach. The law provides limited exceptions, such as the taxpayer’s or spouse’s death, serious invalidity or dismissal.

Is a Malraux SCPI the same as buying a Malraux property directly?

No. With a Malraux SCPI, the reduction is calculated on the part of your subscription allocated to qualifying works, you have no control over the buildings, fund fees apply and your exit usually depends on the fund’s liquidation, which the AMF noted generally takes place 13 to 15 years after subscription.

How is the capital gain taxed when a Malraux property is sold?

It depends on how the property was acquired and held. Under a vente d’immeuble à rénover (VIR), the law includes the seller’s works in the acquisition price; a first-instance judgment of February 2025 applied this even where the works had given rise to the Malraux reduction, but the tax administration stated a different interpretation in 2019, so the point must be validated case by case. In other arrangements, whether works can be added to the acquisition price must be checked under the capital-gains rules. Holding period, residence at the time of sale and fees also matter: the tax cannot be estimated from headline figures alone.

First published 24 September 2024; substantially revised in October 2026. This page provides general information only and is neither investment advice nor personalised tax or legal advice.