Recently extended until 2024, this rental investment scheme, called the Pinel law, gives the possibility of obtaining a tax reduction. According to the website of the Ministry of Economy, Its objective is to increase the number of rental units and to deal with the housing crisis. For this, the State has set up a tax exemption system which is calculated according to the amount you are going to invest (within the limit of €300,000 and €5,500/m2 over one year) and time.
To be able to benefit from this tax exemption under the Pinel law, several points must be respected. The accommodation must be new, but some can be rehabilitated. They must be in the geographical area eligible for the law. Regarding the benefits of the tax reduction, they are made according to the duration of the commitment of the rental. You can commit to 3 periods:
Concretely, if you benefit from the Pinel law, the amount of the reduction of your purchased property applies to your taxes. This corresponds to the chosen period. According to the simulator on the Public Service site, if you have chosen a period of 12 years, a property at €190,000, you will benefit from a reduction of €39,900 over this period, i.e. €3,325 per year. Let’s take several examples of tax exemption with the Pinel law:
These 3 examples of tax exemption allow you to have better visibility of the benefits. Regarding the combination of tax optimizations with the Pinel law, you cannot combine other advantageous laws such as the Malraux law. However, you can still accumulate tax exemption by buying several properties within the limit of 2 properties purchased per year under the Pinel law and an amount of tax exemption of €10,000/year.