Bus & Train Routes - Loi Pinel
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Loi Pinel: Definition - What is the Loi Pinel?
The Loi Pinel is above all a law as its name suggests. It was proposed by Sylvia Pinel as her name also suggests. The Pinel device or Loi Pinel is what is called a real estate tax exemption device. This law is provided for by article 199 novovicies of the CGI (general tax code) . It concerns rental property investments in new and rehabilitated old buildings. It sets the tax reduction applicable to these investments. This is what happens: a taxpayer invests in real estate and undertakes to rent this new accommodation for a minimum period of 6 years, in exchange for which he benefits from a tax reduction distributed in proportion to his duration of rental commitment. So much for the complicated explanation of the device.simple definition of the Loi Pinel , just take an example.
Definition of the Loi Pinel: The Loi Pinel is a real estate tax exemption system created in 2014 and extended until 2024. It allows any investor buying a new home with the aim of renting it, to benefit from a tax reduction . The Loi Pinel was put in place by the government, as part of the Housing Recovery Plan, in order to promote the construction of rental properties in France.
Simple definition of the Loi Pinel.
The Loi Pinel makes it possible to obtain a tax reduction in return for the purchase of a new property which will be rented out. For example: Thomas buys a new apartment in Nice and he decides to rent it out once the property has been delivered. He can then benefit from a tax reduction equivalent to 18% for a period of 9 years, 12% for a period of 6 years and 21% for 12 years of the amount of the property. which represents a total of €63,000 in taxes saved, i.e. €6,000/year on the condition of investing as much as possible of the possibilities offered by the system (i.e. €300,000 of investment in total). A taxpayer paying €6,000 in taxes per year will no longer pay tax for 9 years by acquiring a Pinel property, this is the
Loi Pinel: What is it?
Here are some additional answers to understand the device: First of all, to benefit from the advantages of this device, you will have to respect certain conditions specific to the device itself, such as rent ceilings or areas to be respected. You can find all of these conditions in our downloadable guide or in the official documentation . Also note that you must be eligible for the device to benefit from it. To find out, test your eligibility here .
Note that the Pinel is a proven device since it is the improved version of a previous device: the Duflot device.
The “Loi Pinel” tax system promotes rental property investment, implemented in 2014 and extended until 2024. Accessible to all French taxpayers, it allows them to benefit from an income tax reduction against the purchase of new housing and the commitment to rent it for a minimum period of 6 years. It is in line with other tax exemption solutions such as the Cosse law , the Scellier law or the Duflot law .
The objectives of the Loi Pinel
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:
- Encourage individuals to invest in new rental properties
- Stimulate housing construction in cities where rental demand is strong (“tight areas”)
- Develop the supply of rental housing at controlled and reasonable rents
- Advantages of the Pinel device
The main advantages of the Loi Pinel are as follows:
- Tax relief of up to €63,000 over 12 years
- Possibility of renting the property acquired to his family
- Constitution of real estate assets
- Preparing for retirement thanks to the rents collected and the capital gain on resale
Conditions of the Pinel device
To be able to benefit from the Pinel scheme, several conditions must be met under the Loi Pinel :
- Acquisition of a new home or in a state of completion (VEFA)
- Purchase of real estate in an area eligible for the scheme
- Compliance with rent and resource ceilings for tenants
- 2 Pinel investments per year maximum, within a tax ceiling limit of €300,000
Zoning Pinel 2022
To determine if a specific commune is located in the Pinel zone, see our online Pinel zoning tool here .
Overall, the French territory is divided as follows for the application of the Pinel device:
- Zone A Bis : Paris and near suburbs
- Zone A : more distant Parisian suburbs
- Zone B1 : Large French cities (more than 250,000 inhabitants) + certain towns on the coast and in Corsica
- Zone B2 : Municipalities with 50,000 to 250,000 inhabitants
- Zone C : Rest of French territory (not eligible)