How the French Government Is Reviving Real Estate Investment in 2025

Discover the French government’s new fiscal incentives aimed at revitalizing real estate investment in 2025, including tax amortization for landlords and enhanced renovation benefits to boost rental profitability and sustainable housing.

The French government aims to revive French interest in real estate investment by introducing a new tax incentive to replace the discontinued Pinel law. Housing Minister Vincent Jeanbrun described the current real estate market situation as “catastrophic” and announced a plan to invigorate the rental property sector by boosting profitability for private landlords. The government’s proposal includes creating a fiscal amortization system that allows landlords to deduct depreciation, renovation costs, and furniture expenses from taxable income. This measure targets all rental properties acquired from January 1, 2026, rented unfurnished for at least nine years, encouraging longer-term rental contracts which are generally more secure and affordable for tenants. Additionally, the government plans to double the fiscal benefits linked to energy-efficient renovation works in older buildings to further stimulate investment in the existing housing stock.

This new incentive aims to restore confidence among property owners and tenants alike, reinforcing the crucial role landlords play in fulfilling public housing needs in France. The amortization rates suggested by lawmakers are around 5% for new properties and 4% for older ones, though the government is currently considering a more conservative rate of 2% to control public spending. This fiscal reform also contemplates possible rent caps to balance benefits and limit excesses. The renovation-related tax break, known as the Denormandie scheme, will be expanded with relaxed conditions to support private landlords in eligible cities, provided renovation costs are at least 25% of the total investment. Overall, this comprehensive approach reflects the government’s ambition to make real estate investment more attractive, stabilizing the market after the decline in rental investors in recent years.

Renewed government strategy

The announcement comes amid a broader context of challenges facing the French real estate market. After several years of rising mortgage rates that peaked nearly at 4% in 2024, limiting buyer access to financing, and a drop in rental profitability constrained by rent controls, the government recognizes the need for strong incentives. Demand for rental properties remains high—private landlords currently house nearly 23% of residential tenants in the country—making their participation essential to France’s housing strategy. The new tax amortization is expected to improve investment returns on unfurnished rentals, an underexploited segment compared to furnished rentals, which have dominated investor interest lately.

Moreover, energy performance regulations such as the 2025 ban on renting properties rated F or G in energy efficiency are reshaping investment priorities. The government’s emphasis on doubling renovation incentives aligns with France’s ecological transition goals and offers landlords financial support for making necessary improvements. This integration of fiscal and environmental strategy makes the proposal particularly relevant for investors looking to future-proof their portfolios.

Interested investors should watch forthcoming parliamentary debates, as details like amortization rates, possible rent caps, and eligibility criteria could evolve. However, this initiative signals a turning point, aiming to restore optimism in the rental market and provide middle-class investors with more profitable and secure opportunities to invest in French real estate.

This renewed government strategy offers a promising horizon for landlords and tenants, aiming to balance profitability, tenant security, and sustainable housing improvements, thereby rejuvenating the real estate investment climate in France post-2025.