Déficit foncier 2026: how to reduce your tax bill?
Published on June 18, 2026 · Rental investment
The property deficit is one of the most common mechanisms for reducing the tax burden of an unfurnished rental investment. Properly understood, it acts on your taxable base, with no promise of gain. Here is how it works in 2026 and its limits.
The principle of the property deficit
A property deficit arises when the deductible expenses of an unfurnished property let under the real regime exceed the rental income received. This deficit may then reduce your taxable income, under specific rules.
How the deficit arises
Maintenance and repair works, deductible co-ownership charges, insurance premiums, property tax, loan interest: these expenses are deducted from rental income. When their total exceeds that income, a deficit arises. The logic therefore rewards genuine upkeep of the property, not a theoretical arrangement.
The 10 700 € limit per year
This is the key figure: the property deficit is offset against overall income up to 10 700 € per year. Beyond that, the excess, and the portion arising from loan interest, is carried forward against future property income.
| Item | Rule |
|---|---|
| Offset against overall income | up to 10 700 € / year |
| Excess beyond 10 700 € | carried forward against property income |
| Portion linked to loan interest | carried forward against property income |
Carry-forward over time
The portion not offset is not lost: it can be carried forward against property income in subsequent years, within the time limits set by law. This allows the effect of a large works expense to be spread out.
Interaction with a new property
The property deficit fits into a strategy of unfurnished letting under the real regime. In new builds, deductible expenses are often lower at the outset (little work), which tends to steer this mechanism towards properties requiring expenditure. Conversely, new build opens other routes, such as the LLI or the LMNP, to be examined according to your objective.
The letting commitment
Benefiting from the offset against overall income requires keeping the property let unfurnished for the period set by regulation. Early termination may call the advantage into question.
Common mistakes
Confusing a property deficit (unfurnished letting) with depreciation (furnished letting), forgetting the letting commitment, or overestimating the effect without taking your tax bracket into account are the most frequent pitfalls.
In summary
The property deficit reduces the taxable base of an unfurnished rental investment, up to 10 700 € per year, with possible carry-forward. It is not a promise of yield but a tool for optimisation. Its real benefit depends on your situation: have it analysed by a professional before committing.
