Under the French tax law there is tax relief available in respect of social housing in certain overseas areas, in an effort to increase the supply of low cost residential accommodation. The French Court of Auditors has however called on the Government to abolish the tax breaks accorded for investment in social housing in French overseas departments (DOMs). Investment in the acquisition or construction of social housing in French DOMs gives rise to a reduction in income tax (Article 199 C of the general tax code) or to a reduction in corporate tax (Article 217). The Court first urged the Government to remove the tax breaks in its 2012 annual report. The body said that the Government should find other – less costly – means of financial support for social housing.
Spending on the tax breaks has increased hugely, from EUR11m (USD15.2m) in 2010, to EUR68m in 2011, and to EUR210m in 2012. Similarly, the cost of the corporate tax break rocketed from EUR55.07m in 2010, to EUR99.01m in 2011, and to EUR129.4m in 2012.
