# LLI (intermediate-rent housing): buy-to-let investment with tax advantages — 2026 guide \| Handee > 2026 guide to intermediate-rent housing (LLI): mechanism, official conditions, 10% VAT (CGI 279-0 bis A), rent/income caps, corporate tax credit (CGI 220 Z septies), obligations and risks. Important (2026): the rent and income caps applicable to LLI refer to the "Pinel" scheme caps according to official sources. The amounts are updated via administrative publications. Always check the scales in force at the time the lease is signed. ## Definition: what is LLI? Goal Produce housing with "intermediate" rents (between social housing and the open market), mainly in areas where demand is high. Target tenants Households whose income does not exceed certain caps at the date the lease is signed, in accordance with the applicable rules. Principle of the caps Official sources note an alignment with the caps of the "Pinel" intermediate buy-to-let scheme. Useful reference: the institutional page on intermediate rental housing states that tenant income and the monthly rent must not exceed the caps applicable to "Pinel". (See sources at the bottom of the page.) ## How an LLI investment works ### A. A "regulated" buy-to-let investment You rent out the home as a primary residence, with a capped rent and a tenant who meets an income cap. - Rental as a primary residence (a central requirement under the 10% VAT framework). - Rents and income regulated by caps. - The scheme is extensively documented on the tax side (VAT, filing obligations, clawback). ### B. A structure often via a legal entity Under the reduced LLI VAT rate, the legislation provides that the recipient of the delivery (or the usufructuary in case of split ownership) is a legal entity\. - The "legal entity" condition is part of the reduced rate (VAT) framework. - The property tax credit, for its part, targets legal entities and corporate income tax (see details below). In short: LLI is not a universal "standard product". The reality depends on the structure (off-plan / new build / conversion), the zone, compliance with the caps and the tax conditions (notably for VAT). ## Tax advantages: what the legislation provides Advantage Beneficiaries / scope Official basis (summary) Reduced VAT rate (10%) on certain deliveries Subject to cumulative conditions (location, caps, social mix, legal entity, etc.) Reduced rate provided for in Article 279-0 bis A of the CGI; the BOFiP details the 5 conditions and the effects in case of clawback. Corporate tax credit equal to the property tax Legal entities: a corporate income tax (IS) credit equal to the property tax due on LLI homes that are rented out BOFiP: Article 220 Z septies of the CGI, IS credit equal to the property tax, applicable to certain homes depending on conditions and dates. Property tax exemption (special case) New homes used as a primary residence completed before January 1, 2023, subject to conditions linked to the benefit of 279-0 bis A CGI Art. 1384-0 A: exemption from property tax on built properties for 20 years, subject to conditions. VAT: beware of clawback The BOFiP specifies that if the rental ceases to meet the required conditions, an additional tax payment (VAT) may be due. The logic is: benefit granted ↔ commitment/conditions to be met over time. Key takeaway The tax advantages come with documentary compliance (leases, income supporting documents, rent caps, etc.) and a strong sensitivity to dates (completion, start of rental). ## Eligibility conditions (official VAT framework — CGI 279-0 bis A) The BOFiP (VAT) recalls that the reduced rate provided for in Article 279-0 bis A of the CGI applies when cumulative conditions are met. ### A. Conditions related to the rental - Rental as a primary residence (LLI framework). - Tenant income (assessed at signing) under the caps: reference to the caps mentioned by the law. - Rent under the caps (regulated framework, varying according to the situation and the type of rental). ### B. Conditions related to the investor, the location, the social mix - The recipient of the delivery (or the usufructuary in case of split ownership) is a legal entity\. - The home is located in the territories / perimeters covered by the legislation. - Social mix requirements at the development level may apply (social housing + LLI, etc.). Good reflex: ask the developer / notary for an "LLI" memo that precisely lists the conditions of 279-0 bis A (zones, social mix, dates, supporting documents), and keep all documents proving compliance with the caps (income/rents) during the required period. Topic What the official framework says (summary) Where to check it Reduced VAT rate Applies subject to cumulative conditions (primary residence rental, caps, legal entity, location, social mix, obligations). CGI 279-0 bis A + BOFiP VAT (intermediate housing) Furnished rental Regulated extension: furnished rent cap = "unfurnished" cap + monthly price of the furniture (implementing decree). Decree no. 2024-776 of July 8, 2024 (Légifrance) Income/rent caps Income and rents must not exceed certain caps; references to administrative scales. BOFiP VAT + institutional page (ministry) indicating "Pinel" alignment ## Caps (rents & income): where to find the scales in 2026 Institutional sources indicate that the rent and income caps applicable to intermediate housing are those of the so-called "Pinel" intermediate buy-to-let scheme. In practice, the amounts are published/updated via the administrative references (scales and updates). Scale needed What you must check Source / entry point Rent caps (LLI) Zone, type of rental (unfurnished / furnished), lease signing date, rounding method/coefficients if applicable. "Pinel" references (principle) + furnished rental decree ("unfurnished" cap + furniture) Income caps (LLI) Household composition, zone, N-2 / reference rules, supporting documents to keep when the lease is signed. BOFiP VAT (reference) + institutional page indicating alignment with "Pinel" caps Furnished rental rent cap Furnished cap = unfurnished rental cap + flat rate/monthly rental price of the furniture provided for by the legislation. Decree no. 2024-776 (Légifrance) + BOFiP VAT (reference to Article 87 of Annex III) Update note (January 2026): some 2026 scales may be in the process of being published/updated depending on the administrative sources. To remain "zero risk", rely on the official pages listed below and archive the version consulted (PDF/print). ## Obligations, duration and clawback: what to anticipate ### A. Ongoing compliance - Keep the tenant's income supporting documents as of the lease signing date. - Keep the rent calculation (floor area, zone, applicable scale) and any useful appendix. - Make sure the home is rented as a primary residence under the conditions provided. ### B. Tax risk if you leave the framework - The BOFiP VAT guidance states that the purchaser may be required to pay the additional tax if the rental ceases to meet the conditions. - The "property tax / corporate tax" schemes have their own rules: check the compatibility of the structure and the eligibility conditions. Tip: document the file from the start (lease checklist + income + scales + proof of primary residence). That is what protects you in the event of an audit. ## Risks & points to watch (LLI) Complexity of the framework LLI touches on VAT, caps, the nature of the lease and the investor's status. A "rough" reading exposes you to clawback. "Caps" risk A wrongly applied cap (zone, floor area, furnished vs unfurnished) can lead to non-compliance. Keep a record of the official scale used. "Exit" risk Resale, change of use, or ceasing to rent under the prescribed conditions: plan ahead, as this can trigger tax consequences. ## FAQ (2026) Does LLI impose rent and income caps? Yes: the official framework refers to caps. Institutional sources indicate alignment with the "Pinel" scheme caps, and the BOFiP VAT guidance recalls that income and rents must comply with caps to benefit from the tax framework. Does the 10% VAT apply automatically? No: the reduced VAT rate is conditional on meeting cumulative requirements (primary residence rental, caps, legal entity, location, etc.). The BOFiP describes these conditions precisely and the consequences in case of clawback. LLI and property tax: exemption or tax credit? There is a long-term property tax exemption case for certain homes (CGI 1384-0 A, conditional and limited by the completion date), and a corporate tax credit mechanism equal to the property tax for legal entities (CGI 220 Z septies, commented in the BOFiP). The right mechanism depends on the home's date and the investor's status. ## Other investment solutions As a complement or an alternative to LLI, other schemes can help you invest in real estate. LMNP (non-professional furnished rental) Furnished rental: tax advantages, tax regimes, conditions and obligations. Complete guide with official sources. Learn more → Serviced furnished rentals Professional furnished rental: definition, conditions, tax advantages, differences with LMNP, and obligations. Learn more → Bare ownership Split-ownership real estate investment: definition, tax advantages, reduced purchase price, simplified management, and estate planning optimization. Learn more → Unfurnished rental Unfurnished rental: the classic buy-to-let investment. Taxation, advantages, obligations and differences with furnished rental. Learn more → Girardin Girardin scheme: investing in the French overseas territories with a tax reduction. Conditions and tax advantages. Learn more → Denormandie Denormandie scheme: a tax reduction for buying and renovating properties in certain areas. Learn more → Historic Monument Investing in a Historic Monument: exceptional tax advantages for heritage restoration. Learn more → ## Disclaimer The information in this article comes from the official sources referenced in the "Official sources" section at the bottom of the page. Handee cannot be held liable for any errors, omissions or interpretations of the information presented. If in doubt or for any question specific to your situation, we invite you to consult the official sources mentioned directly (Légifrance, BOFiP, Ministry of Ecology, etc.) or to contact a qualified professional (chartered accountant, tax advisor, notary). The exact rules applicable to your case depend on the structure (legal entity, zone, completion dates, compliance with the caps), the structure of the transaction and the legislation in force. Eligibility conditions, scales and rules may change. Only the official sources are authoritative. ## Official sources Les informations de cet article sont reliées aux références publiques utiles pour vérifier les conditions et les démarches. - BOFiP - Real estate transactions in the intermediate housing sector (VAT) BOI-TVA-IMM-30: Conditions for applying the 10% reduced VAT rate - CGI, Article 279-0 bis A - Reduced VAT rate for intermediate housing Reduced VAT rate provided for intermediate housing - Decree no. 2024-776 - Rent cap for furnished rentals Monthly rent caps for furnished rentals provided for in Article 279-0 bis A - BOFiP - Corporate tax credit in favor of intermediate rental housing (CGI 220 Z septies) BOI-IS-RICI-40-10: Corporate income tax credit - CGI, Article 1384-0 A - Property tax exemption for intermediate housing Exemption from property tax on built properties for 20 years - Ministry - Institutional intermediate rental housing Income/rent caps aligned with the Pinel scheme ## HTML / llms.txt - [HTML](https://handee.fr/en/achat-logement/investissement/lli) - [llms.txt](https://handee.fr/en/achat-logement/investissement/lli/llms.txt)