2023-07-10 07:30:00
The Pinel scheme, which allowed individuals to benefit from tax reductions on the purchase of rental accommodation, will end on December 31, 2024. This tax niche is deemed inefficient and too onerous by the Court of Auditors .
End of the Pinel system: what impact on rental investment? / iStock.com – BildWerk
What is the Pinel device?
This real estate system allows owners of new or old housing, purchased with a view to renting (for use as a main dwelling and unfurnished) for at least 6 years, to benefit from a tax reduction, while allowing the tenant to benefit from a rent lower by regarding 20% compared to the prices practiced on the market. To benefit from the Pinel law, the accommodation must have been acquired between September 1, 2014 and December 31, 2024, be located in an area of rental tension (zones A and B1), and be part of a building comprising several dwellings. Individual housing is therefore excluded from the system, unless the building permit was submitted before January 1, 2021. Until the end of 2022, the tax reduction rate for Pinel housing was, depending on the rental period (6, 9 and 12 years), 12%, 18% and 21% of the acquisition amount, with a maximum tax reduction of €6,000 per year. Since the beginning of 2023, the reduction has been limited to 10.5%, 15% and 17%.
The Pinel device in the crosshairs
Nearly 300,000 households benefit from the Pinel scheme, which succeeded various similar operations in 2014 (Robien, Borloo, etc.). But the current Pinel and Pinel + devices, considered ineffective, have long fueled controversy. The Court of Auditors, which has already ruled in favor of its abolition, considers that the low economic impact of the measure does little to support the building sector, for an annual cost that is too high for public finances (more than 1.5 billion euros). It would be the 7th most expensive tax niche for French households (the first being the tax credit for home employment). In addition, 50% of the beneficiaries have high incomes (benchmark tax income above €70,000). However, according to the Federation of Real Estate Developers (FPI), the Pinel is not, in the spirit of the law, intended for the rich, but rather for investors of the middle or upper middle classes. Another argument coming to serve the device: the use of Pinel would only be profitable in half of the cases. Whatever the grievances once morest the Pinel law, the executive’s objective is clear: savings must be made to finance the new “housing plan” aimed at reviving the construction of new housing. Devices considered costly and inefficient, including Pinel and Pinel +, are targeted as a priority.
A gradual end, and other options available
Investors who have subscribed to one of these arrangements for 6, 9 or 12 years will, however, be able to benefit from their tax advantages until the end of the commitment period, provided that they post rents 15% lower than compared to real estate market prices. As Pinel operations remain possible until the end of 2024, the final end of the system will not be effective until 2036. Investors are, however, beginning to move towards other tax-efficient solutions for investing in rental real estate. Among these, let us mention the “Super Pinel” or Pinel + (which will make it possible to retain the same advantages as the classic Pinel), non-professional furnished rental (LMNP), the Loc’Avantages system, the Denormandie law, investment Malraux, or even the land deficit.
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