The Girardin Société law, also known as the Girardin IS law, represents a major tax lever for companies wishing to invest in the overseas real estate sector. Initially introduced on July 21, 2003 and extended until the end of December 2025, this law offers significant opportunities to reduce, or even exempt, corporate income tax (IS) for those involved in the acquisition of new housing.
The primary aim of the Girardin Société law is to boost real estate investment in French overseas departments and territories (Dom-Tom) by encouraging companies to participate in the creation and improvement of local real estate assets. In return for this investment, companies benefit from substantial tax advantages.
All companies subject to corporation tax, established in mainland France or the French overseas departments, may acquire one or more properties up to a maximum of €1 million per year or per program, with sales not exceeding €20 million.
To benefit from this measure, companies must acquire new housing or housing in a future state of completion (VEFA) in Overseas France. These units must then be rented out for a minimum period of five years. This rental period is an essential condition for taking full advantage of the tax benefits offered by the law. Rental must take place within a maximum of 12 months of completion. Rent and income ceilings for tenants must be respected before the property can be rented out.
The main advantage of the Girardin Société law is that companies subject to corporate income tax can deduct from their taxable income all or part of the investment made to acquire these new homes in the French overseas territories. The reduction rate is that of the current tax rate, i.e. 15% or 25% in 2023.
The law also allows all expenses to be deducted from income (except acquisition costs), as well as interest on loans taken out for the acquisition, if the company has opted for this method of financing.
In conclusion, investment under the Girardin IS law represents a considerable advantage for a company, as it enables corporate income tax to be reduced to zero.
