The Pinel law is a system put in place to encourage investment by individuals in the rental property sector. Officially replacing the Duflot law since January 1, 2015, it only concerns purchases made until December 31, 2016. The purpose of this system is to improve and make real estate investment conditions more advantageous for French taxpayers ( ex: up to 21% tax reduction on income from rental property). Focus on the main advantages of investing in the Pinel law.
Investment in the Pinel law allows you to benefit from a reduction in income tax: 12% for a rental over 6 years, 18% for a rental over 9 years and 21% for a rental over 12 years. This system thus makes it possible to benefit from a tax advantage of up to €63,000. The amount of the investment is however capped at €300,000 per year for 1 or 2 dwellings maximum.
Unlike the Duflot system, the Pinel law offers investors the possibility of renting their property(ies) to their ascendants and/or descendants (e.g. parents, children, grandchildren, etc.), without losing the tax advantage. . However, this advantage only concerns investments made from 1 January 2015.
The Pinel law offers landlords the possibility of deducting certain expenses from their taxes. Examples: costs related to the rental management of the property; loan interest; loan guarantee fees; property tax; housing maintenance and repair costs; insurance premiums…
Practical, investment in the Pinel law is just as advantageous for investments made through SCPIs (Sociétés Civiles de Placement Immobilier). The tax benefits are effectively the same as those in force for individuals: income tax reduction calculated in the same way as for the purchase of a new home: 12% for a rental commitment of 6 years, 18% for a 9-year commitment and 21% for a 12-year commitment.