Description
The Pinel Law is a tax incentive scheme introduced by Sylvain Pinel and Manuel Valls to revive new housing construction in France. It replaces the Duflot scheme and retains roughly the same principles and conditions.
It allows a tax reduction on the purchase of a new property, provided it is kept for 6, 9, or 12 years for a reduction of 12%, 18%, or 21%. The maximum tax relief allowed is €300,000 per year.
For the scheme to work, a Pinel purchase must be made between September 1, 2014, and December 31, 2021.
This law therefore allows a considerable tax reduction and the opportunity to become the owner of a rental investment.
The government has decided to extend the Pinel Law until 2024 so that investors can participate in the development of new rental housing stock in high-demand areas. Depending on the rental commitment, property owners currently benefit from a proportional tax reduction:
To be eligible for these tax benefits, investors must meet several eligibility criteria:
The government has decided to reduce the tax benefits associated with this scheme from January 1, 2023. From this date, tax reductions decrease:
| Tax reduction in 2022 | Tax reduction in 2023 | Tax reduction in 2024 | |
|---|---|---|---|
| 6-year commitment | 12% | 10.5% | 9% |
| 9-year commitment | 18% | 15% | 12% |
| 12-year commitment | 21% | 17.5% | 14% |
While this tax relief scheme is maintained in 2024, 2022 is the last year in which you can benefit from the Pinel Law at full rate. From 2023, the current law will gradually give way to Pinel Plus, until its complete replacement from 2025. Thus, in 2023 and 2024, a few exceptions exist to avoid this reduction in tax relief:
Emmanuelle Wargon, the Housing Minister, announced the arrival of Pinel Plus in 2024. Also called “Super Pinel,” Pinel Plus retains the initial tax benefits of the Pinel Law. However, the eligibility conditions are evolving.
In addition to the current criteria, the Pinel Plus tax reduction will be reserved for property owners who meet the following rules:
To benefit from one scheme or the other, you must refer to the purchase date of the property. If it is before December 31, 2022, the standard Pinel applies.
After this date, you will automatically be covered by Pinel Plus for your new property. Of course, all the criteria of this new law must be met to obtain a tax reduction.
Despite the evolution of the Pinel scheme, tax reductions remain attractive if you choose an eligible investment in 2023. For greater simplicity and to benefit from a full rate, it is better to invest in 2022. Once Pinel Plus is implemented, you will need to meet the additional criteria to retain the benefits of this law.
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