BECOMING A HOMEOWNER
The Pinel law to reduce your tax bill:
Your tax benefits
When you buy a new property, the Pinel law allows you to benefit from tax reductions and build up your property portfolio. This tax incentive applies to new (or renovated) properties that are intended to be rented out.
The terms of the law, the conditions for tax relief, the tax benefits for homeowners... Our experts reveal everything you need to know about the Pinel scheme.
The Pinel Law: What are the key principles ?
What is the Pinel law?
In force until the end of 2024, the Pinel law was introduced by the government to support private rental investment, boost the housing sector and increase the supply of rental properties. The advantageous Pinel scheme makes it easier for you to invest in new-build property. It enables you to buy a rental property while benefiting from substantial tax reductions.
Are you eligible for the Pinel law?
Under the Pinel scheme, individuals investing in new rental properties can benefit from a reduction in their income tax, subject to the following conditions:
- You must located in an apartment block
- Maximum rent and income ceiling for tenants
- A minimum overall level of energy performance
- The property is located in an area where there is an imbalance between supply and demand
- Initial rental period of 6 or 9 years, extendable to 12 years, with increasing tax benefits
What are the requirements for the investment?
- The tax reduction applies for the entire rental agreement period, up to an overall limit of €300,000 and €5,500 per square metre
- You may not make more than two investments per year, up to a limit of €300,000
- The property must be located in one of the eligible Pinel zones
- The tax reduction must be included in the tax allowance ceiling, which is up to €10,000 per year per household
What are the requirements for renting out the property?
The property must:
- Be let for a period of 6, 9 or 12 years
- Not be occupied by yourself for at least 6 years
- Be rented out to your tenant as their main residence
- Be unfurnished
- Be located in one of the eligible Pinel zones (A, A bis, B1)
The rent must also comply with tenant income limits and rental ceilings:
- The maximum rent per month is defined by the surface area of the property and the area in which it is located
- Maximum income limits are set for tenants based on the composition of their household and the area in which the property is located
2024 Pinel Law Tax Reduction
The tax reduction varies according to the length of the commitment:
- 9% over 6 years
- 12% over 9 years
- 14% over 12 years
The maximum investment under the Pinel Act is €300,000, resulting in a potential tax rebate of up to €42,000.
Need more information?
What are the tax advantages of the Pinel scheme?
The benefits of investing in rental property under the Pinel scheme
Buying new property under the Pinel law provides numerous tax and property benefits:
- You benefit from a tax reduction: there are significant tax benefits under the Pinel law. As an owner, you benefit from a tax reduction of up to 14% of the amount of the investment
- You build up a solid property portfolio
- You prepare for your retirement by earning rental income and generating capital gains on re-sale
- You have the option to rent your property to descendants or ascendants (outside your tax household) while benefiting from tax advantages
MGM is a leading specialist in property development, and offers you a range of new upmarket developments that are eligible for the Pinel law.
To support you in your home-buying plans, our advisors are here to share their expertise and help you navigate through the various stages of a property purchase. We can advise you on various property loans, tax exemption schemes and acquisition costs.
At MGM, our experts are committed to helping you make a success of your rental property investment.