What do you want to know?
Why invest in the Pinel law?
The Pinel system helps you build up real estate assets while benefiting from advantageous tax conditions.
You will collect rents while taking advantage of tax reductions.
The main ones advantages of the Pinel law are the following :
Tax allowance of up to € 63,000 over 12 years
Possibility of renting the acquired property to his family
Constitution of real estate
Preparation for retirement thanks to the rents collected and the capital gain on resale
The device Pinel concerns investments in new housing or in a future state of completion made between September 1, 2014 and December 31, 2024.
Until December 31, 2022
The income tax reduction can reach up to 21% of the price of housing, up to a limit of € 300,000 per year and € 5,500 per m².
Investors can choose the duration of their commitment: 6 or 9 years with the possibility of renewal up to 12 years;
They can rent the accommodation acquired from January 1, 2015 to their ascendants or descendants under certain conditions;
The tax advantage for real estate investment companies (REITs) is aligned with that of individuals.
The implementation of the Pinel system responds to objectives that the French government wishes to fulfill in order to relaunch housing . The main ones are as follows:
Encourage individuals to invest in new real estate for rental purposes
Stimulate the construction of housing in cities where rental demand is high (“tight areas”)
Develop the supply of rental housing at controlled and reasonable rents
Pinel Law: Build a heritage & tax exemption
What is the Pinel device?
And the Pinel overseas?
The Pinel system is recommended for taxpayers who have their tax domicile in France and whose income tax from the progressive scale is high enough to charge the reduction.
The Pinel tax reduction is subject to the cap global tax loopholes. It is therefore necessary to be vigilant about the tax situation of the client and the other tax advantages from which he could benefit (tax credit for childcare expenses for young children, subscriptions of FIP or FCPI units, etc.)
The taxpayer must undertake to rent the bare building for a period of 6 or 9 years, extendable by three-year period up to 12 years.
There will be no questioning of the tax benefit in the event of the taxpayer's death.
The Pinel Outre-Mer law incorporates the principle of Pinel metropolis law : it is a tax exemption system real estate enabling investors to benefit from a tax reduction by investing in new or rehabilitated housing in overseas territories. In return for the rental of the property, the lessor recovers a percentage of the amount of his investment on his annual tax return.
Housing type
The device Pinel concerns investments in new housing or in a future state of completion made between September 1, 2014 and December 31, 2024.
The tax reduction concerns the following goods:
New housing
Housing in future state of completion
Housing you build
Old housing undergoing renovation work (which represents at least 25% of the total cost of the operation).
Housing undergoing rehabilitation work
Local transformed into residential accommodation
The accommodation must respect a certain level of overall energy performance (BBC 2005 label, compliance with thermal regulations RT 2012, HPE renovation 2009 label or BBC renovation 2009, etc.).
Ownership of Pinel & advantage of new
The investment can be made:
live,
through a company not subject to corporation tax, (through an SCI)
or by subscribing to shares in real estate investment companies (SCPI, SCPI Pinel type)
The taxpayer must be the full owner of the building or of the securities (SCI or SCPI shares).
Any dismemberment of property is excluded, except in the specific case of the death of the taxpayer.
A joint purchase is quite possible. Each joint owner benefits from the tax reduction calculated on the fraction of eligible expenses corresponding to the share.
Buying a new home has certain advantages over buying an old one:
Registration fees are reduced.
Maintenance costs for new housing are reduced: no need to plan for upgrading or improvement work.
Better performance: thermal and energy qualities
Benefit of the ten-year guarantee
Pinel Overseas
The accommodation must be located:
in an overseas department: Guadeloupe, Guyana, Martinique, Réunion, Mayotte;
or in an overseas collectivity: Saint-Barthélémy, Saint-Martin, Saint-Pierre-et-Miquelon, New Caledonia, French Polynesia, Wallis and Futuna.
The housing must respect a certain level of overall energy performance, which varies according to the location of the property and whether it is a new construction or an old housing.
Succession & Donation
In the event of the subscriber's death, the capitalization contract is distinguished from the life insurance contract by the absence of exemption from inheritance tax.
The capitalization contract has the particularity of not being unwound on the death of its subscriber. The spouse and / or heirs of the deceased therefore replace the latter.
The heir is therefore subject to the common law of inheritance, but retains the tax precedence of the contract, and may continue to use it by keeping it, or by making withdrawals or free payments, while benefiting from the tax system. applicable depending on the opening date of the contract.
The capitalization contract may be the subject of a donation and / or dismemberment or allow the re-use of dismembered funds.
At the extinction of the usufruct by the death of the usufructuary, the bare owner becomes the sole holder of the capitalization contract.
Indeed, the application of the dismemberment mechanism makes it possible to combine usufruct and bare ownership free of inheritance tax. In other words, the value of the usufruct is transmitted free of charge.
Zoning
Housing must be located in a municipality eligible for the scheme, characterized by an imbalance between housing supply and demand, namely:
zone A;
zone A bis;
zone B1
municipalities whose territory is covered by a defense site revitalization contract, or has been covered during the 8 years preceding the investment.
Zone A bis brings together cities with very high demand, such as Paris, the inner suburbs and a few cities in the French Geneva basin. Zones A and B1 also cover towns with a strong need for new housing.
Zones B2 and C concern the so-called “relaxed” zones, in which the housing supply exceeds demand.
Since December 31, 2018, zones B2 and C are no longer eligible for the Pinel system, neither in the old nor in the new.
Pinel rental & capping
The investor must commit to renting the property for a period of 6 or 9 years.
The accommodation must be rented empty (unfurnished) as main house .
It must be rented no later than 1 year after completion of the building or after its acquisition.
The minimum duration of the rental commitment is 6 years.
The rent must not exceed a certain ceiling determined according to the area in which the accommodation is located, throughout the duration of the rental commitment.
The rent ceiling must be respected throughout the duration of the rental commitment. The rent to be taken into account is the rent excluding charges.
The resources of the tenant must not exceed, on the date of conclusion of the lease, one certain ceiling revalued each year.
In terms of housing, France is divided into several zones; the famous A / B / C zoning.
Created in 2003 as part of the rental investment scheme known as Robien.
It was revised several times in 2006 and 2009.
The classification criterion in one of the zones is the tension of the local real estate market, that is to say the balance in rental supply and demand.
Zoning A / B / C characterizes the tension of the housing market by dividing the territory into 5 zones, from the most tense (A bis) to the most relaxed (zone C).
Zone A bis: Paris and 76 municipalities in the inner suburbs
Zone A: Île-de-France, Côte d'Azur, Lille, Lyon, Marseille, Montpellier and the French part of the Geneva agglomeration.
Zone B1: All metropolises with more than 250,000 inhabitants, the greater Parisian suburbs, and some cities where property prices are high (Bayonne, Saint-Malo, La Rochelle, Annecy, Chambéry, Cluses, Corsica, the DROM)
The Pinel device is not confined to the limits of the metropolis. All the overseas departments and regions are eligible for the Pinel scheme: Guadeloupe, Guyana, Martinique, Reunion, Mayotte, Saint-Barthélémy, Saint Martin, Saint Pierre-et-Miquelon, New Caledonia, French Polynesia as well as the Wallis and Futuna Islands.
They are classified in zone B1.
Zone B2: Cities with more than 50,000 inhabitants and those having obtained special approval from the Prefecture
Zone C: Rest of the territory
You benefit from a tax reduction if you are domiciled in France for tax purposes and have made rental property investments, subject to fulfilling the conditions relating to the tenant and the rental. The so-called Pinel tax reduction applies to investments made from September 2014.
The tax reduction is calculated on the cost price of at most 2 dwellings.
The total amount invested is retained within the limit of the following 2 ceilings:
€ 300,000 per taxpayer per year
€ 5,500 per m² of living space
You must also take into account the global cap on tax benefits .
The rate varies depending on the length of the rental commitment.
For the Pinel Métropole scheme, an overall reduction rate of:
12% for a 6-year commitment;
18% for a 9-year commitment (or 6 years extended once);
21% for a 12-year commitment (9 years extended once or 6 years extended twice).
For the 2021 taxation of your 2020 income, the total tax benefits cannot result in a reduction in the amount of tax due greater than € 10,000.
For the Pinel Outre-mer system, an overall reduction rate of:
23% for a 6-year commitment;
29% for a 9-year commitment (or 6 years extended once);
32% for a 12-year commitment (9 years extended once or 6 years extended twice).
For the 2021 taxation of your 2020 income, if you have also made investments overseas, the total tax benefits cannot result in a reduction in the amount of tax due greater than € 18,000.
Advantages & Disadvantages of Pinel
Pinel device
Example of investment in Pinel
1
Initial situation
Corinne and Gilles are married and owners of their main residence.
They want to invest in real estate.
Objective: to rent the accommodation they are going to buy to repay the loan and then benefit from additional income.
They pay € 7,000 in income tax and want to take advantage of their investment to reduce their taxes.
2
Pinel device
Guided by their CGP, they decide to invest in Pinel.
The price of the operation, commissions and notary fees in the new building included, amounts to € 176,500.
They opt for a 12-year rental commitment, ie a reduction of 21% of the price of their investment distributed per year.
3
Final situation
2% per year for the first 9 years, i.e. € 3,530 per year in tax reduction,
1% per year for the last 3 years, or € 1,765 per year in tax reduction.
In total, they benefit from a total tax reduction of € 37,065.
