The principle of the Pinel law is the purchase of new real estate in an area of the territory eligible for the scheme.
The investor commits to renting this property for a fixed period. The amount of the tax benefit under the Pinel law depends on this rental period:
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Tax reduction of 12% for a lease of 6 years
Tax reduction of 18% for a lease of 9 years
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Tax reduction of 21% for a lease of 12 years
To do this, taxpayers must invest in real estate with the aim of renting it out. They then commit to a rental period of between 6 and 12 years, which will result in a tax reduction of between 12% and 21% of the total amount invested. At most, an investor can reduce their taxes by €63,000 over 12 years thanks to the Pinel scheme.
The provisions of the recent Pinel law, as well as the finance law of 2018, have extended its application until the end of 2021. Its extension has been redirected towards cities in zones A bis, A, and B1, in accordance with housing policy to better target assistance. Regarding zone B2, the government has shown flexibility for 2018 only to allow the transition for investors. Excluded from this extension, zone C has not been eligible since the end of 2017.
This tax advantage provided by the provisions of the official text, as well as the rents received from the rental, allows you to recoup your initial investment. At the end of your commitment, you are free to continue renting your property, keep it for personal use, or sell it to realize a greater value.
Tag: Tax exemption with the Pinel law