The Overseas Territories are an increasingly attractive area for many investors wishing to acquire real estate. Reduce your income taxes, benefit from rental income, or simply acquire a second home… The reasons that push these investors to invest in Martinique are numerous, but are they valid? Should I invest in Martinique? Are there any disadvantages to this type of investment? ? Century 21 Cirick tells you everything!
Invest in Martinique and take advantage of the rental attractiveness of the department
Located in the West Indies, Martinique has more than 350,000 inhabitants and the GDP per capita is the highest in the overseas departments (€24,110) after Guadeloupe. Tourism is one of the main sources of income for the territory. Despite a slightly decreasing population, Martinique is experiencing a favorable economic situation which contributes to its attractiveness. Tourism makes certain rental locations particularly attractive, which are available for good value for money.
Benefit from advantageous taxation: Reason #1 to invest in Martinique
The Pinel Overseas Law is the major reason that drives taxpayers to invest in Martinique. With this law, investors can benefit from a reduction in their income taxes if they acquire a new or rehabilitated housing. The rate of tax reduction proposed by the Pinel law can go up to 32%. In order to benefit, the purchaser must undertake to rent the property, it must be the main residence of the tenant and the lease must extend over a period of 6, 9 or 12 years. Each rental period entails a percentage reduction different tax:
- For 6 years, 23%;
- For 9 years, 29%;
- For 12 years, 32%.
For example, by buying a home in Martinique worth €150,000, an investor could save €4,000 for 12 years. There are other conditions that the investor must respect, in particular 3 ceilings: the monthly rent, the resources of the tenant and the purchase price per square meter. The planned rent ceiling by the Pinel law in Martinique is €10.55 per m2. This figure must be multiplied by an area coefficient of the following way:
10.55 x (0.7 + 19 / area in m2)
As for the tenant's resource ceiling, it is set at €28,606 for a single person and €38,202 for a couple. If the single person/couple has a dependant, the ceiling is €45,941. Other precision : the tax reduction provided for by the Pinel Outre-mer law must be included in the calculation of the overall cap on tax loopholes. In Overseas France, there is a specific ceiling of €18,000 per year and per household.
During the next few years, the system linked to the Pinel law is set to gradually disappear. The rates of tax reduction will experience a first reduction in 2023 and then in 2024. As a result, 2022 is the last year for investors who wish to benefit from this scheme at the full rate and invest in Martinique.
Investing in Martinique: for whom is it interesting?
Investing in Martinique is a very interesting option, especially for investors looking for a real estate tax exemption more advantageous than in mainland France. This attractiveness is due, on the one hand, to the rates of reduction offered by the Pinel Outre-mer law and, on the other hand, the ceiling for tax loopholes set at €18,000.
So, should you invest in Martinique without hesitation? No! Any investment obviously requires reflection and expertise. The first criterion to take into account is the situation of the investor. Buying a property in Martinique is more interesting for highly taxed taxpayers: those who pay more than €5,000 in taxes on Income. The Pinel Outre-mer law is particularly aimed at this type of taxpayer.
In addition, it is preferable that the investor has a solid heritage before investing in Martinique. In particular, taking out a warranty can be a tricky process, especially in some geographical areas. It sometimes happens that the investor has no choice but to go through a mutual surety; this type of structure often requires the investor to have real estate assets comfortable.
Should you invest in Martinique? The pros and cons
In order to help you weigh the pros and cons, Century 21 Cirick, a real estate agency in Martinique, has review for you the pros and cons of investing in this department.
Investing in Martinique: the advantages
First of all, by investing in Martinique, you ensure rental income over the long term. Overseas distinguishes itself from mainland France by its rental profitability: the latter is in fact generally more advantageous than in France itself. This is the case for new real estate in particular. Furthermore, real estate Martinique offers good potential for upgrading. If you wish, for example, to obtain a retirement pension, investing in Martinique is a good option.
We have already mentioned it: in terms of taxation, Martinique is very attractive. The Pinel Overseas Law allows you to obtain significant tax reductions over 6, 9 or 12 years. For French taxpayers, this is one of the best tax exemption opportunities legally available. Note that she has intended to gradually disappear in the years to come.
Finally, there is a more personal advantage: indeed, what could be better than the acquisition of accommodation on an island paradise like Martinique? You can, for example, make it a second home for your family, or a vacation spot for your old age.
Investing in Martinique: the disadvantages
First of all, distance is a criterion to take into account. Keep in mind that your property is would be several thousand kilometers from France. This distance can be a source of worry, make difficult to manage the property, repairs, visits, etc.
Before investing in Martinique, it is therefore important to check that the property corresponds to the information that the seller gives you, but also that the price corresponds to the standards of the Martinican market. You must therefore check the adequacy of the sale price, the rental demand, the amount of the rents, etc. At Century 21 Cirick, we strongly advise you to travel to visit the property yourself. Finally, it is best to call the advice of a real estate agency installed on site in order to benefit from trusted expertise.
