- Real solidarity leases (bail réel solidaire) are long-term leases granted only by approved land solidarity organizations (OFS) to provide housing for principal residences, subject to income limits and, where applicable, rent and sale-price caps.
- Under Article 278 sexies III(4) of the French General Tax Code, VAT at the reduced 5.5% rate applies to supplies made to an OFS under a real solidarity lease.
- The 5.5% reduced VAT rate also applies to self-supplies by an OFS of buildings intended to be subject to such a lease, including after works if applicable.
- The reduced rate likewise covers transfers of real property rights under the lease and supplies of building land to an OFS under a real solidarity lease.
- The lease may run from 18 to 99 years and can be renewed on transfer of the attached rights, provided the new acquirer still meets the income conditions.
Source: bofip.impots.gouv.fr
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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