which savings to choose at the end of 2021?

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Livret A and LDDS have drained € 24 billion in net inflows since January 2021, compared to € 32.7 billion in 2020, over the same period. In other words, these two tax-free booklets still attract a large number of savers.

Anyway, the remuneration is not one of the strengths of the Livret A. It has an annual rate of return of just 0.50%. This is low compared to other financial investments like life insurance.

In order to benefit from better profitability, savers often opt for stone. Because of this, investing in a managed residence can generate a return greater than 4%. The rents are guaranteed by a long-term, renewable commercial lease. Advantages specific to LMNP status. The icing on the cake, the residence is managed by a qualified operator.

Comparison of the taxation of the Livret A and the LMNP

Taxation is one of the main assets of the Livret A. Indeed, it allows the saver to receive remuneration net of tax and social security contributions. The interest generated on this interest-bearing savings account is exempt from tax. The absence of additional fees is also one of the reasons encouraging savers to open a Livret A.

For its part, the LMNP status comes with various interesting advantages. The rental income generated is considered as Industrial Commercial Profits. They are low taxed, unlike property income. Besides, the real simplified regime, applicable to the LMNP, makes it possible to deduct rental income from various charges. Enough to reduce the tax bill of a heavily taxed taxpayer for several years.

Good to know : LMNP status can be combined with the Censi-Bouvard tax exemption system. This is the winning combination to pay less tax by overcoming the constraints of rental management. The advantages to be drawn are of a fiscal nature: tax reduction of 11% and recovery of VAT (up to 20%).

What about liquidity?

Profitability and taxation are the main strengths of the LMNP system. However, it has some drawbacks such as liquidity. Unfortunately, a real estate sale takes a long time. It is simply impossible to sell (furnished) accommodation in the space of a few months. What’s more, the search for potential buyers can go on forever.

For its part, the Livret A allows savers to recover their money at any time. You just have to go to a bank teller. Savings placed on tax-exempt booklet are still available. There are also mobile applications that allow you to easily manage your savings remotely.

In short, the Livret A and the LMNP are complementary investments. The first allows you to build up long-term savings, while the second brings you regular and secure income. And your tax bill is no longer likely to be steep.

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