The Pinel law
The Pinel law offers a tax reduction when buying a new property.
To obtain this reduction, the property must be rented for at least 6 years and be located in an area eligible for the Pinel law. The purchase of property in Pinel law must be made between September 1, 2014 and December 31, 2021.
Up to a 63 000€ tax reduction thanks to the Pinel law.
How does the Pinel law work ?
You invest in a new housing respectful of environmental standards for an amount of 300 000 € maximum. You rent it according to the legal price in the area where your acquisition is located with a minimum commitment of 6 years. You are entitled to a tax reduction of up to 21% of the amount of your real estate investment, it means up to € 63,000.
The tax reduction is spread over the duration of the operation, but the application of this reduction is made in proportion to the price of the housing purchased and its amount is calculated according to the duration of rental of the property.
Pinel Law : eligibility
There are certain conditions to respect in order to use this device:
- Purchase in a new building
- Building with the BBC label or RT2012
- Building under construction
- Rent the property as a non-furnished main residence
- Rent the property within 12 months of purchase
- Respect the price of rent according to the geographical area
- Respect the rental period of 6 to 12 years
Advantages of Pinel law :
- A tax reduction of up to € 63,000 over 12 years
- The possibility to rent to his ancestors and descendants
- The possibility of retaining the advantages of the system by investing through a REIT (civil real estate investment trust)
- The costs and maintenance are reduced because the apartments are purchased new with the obligation to comply with BBC or RT2012 standards.
- The possibility of investing in homes of all sizes in markets where rental demand is high (tight areas).
- Expenses and maintenance are reduced because the homes are purchased new with the obligation to comply with BBC or RT2012 standards.
Failure to comply with rental commitments results in the loss of tax incentives. Investing in real estate involves risks