Rabot in 2023 then even more strongly in 2024, the Pinel system no longer offers, at best, only a tax reduction of 14% compared to 21% previously. While Pinel should disappear at the end of the year, should we still get started?
End clap for the Pinel system. Accused by some, notably by the Minister of the Economy Bruno Le Maire, of being an expensive tax niche with low efficiency, this system put in place in 2014, and which followed several similar schemes (Robien, Borloo, Scellier, etc.) expected to end on December 31, 2024after a first regular planing in 2023 then 2024.
Taxes: removal of Pinel, the end of a tax loophole that costs you dearly
Pinel – named after the Minister of Housing of the Valls I and II governments of 2014 and 2016 – is a tax incentive system rental investment in new properties or rehabilitated properties considered new. Until the end of 2022, the rate of tax reduction could range from 12% to 21% of the amount of the acquisition, up to 300,000 euros, and depending on the duration of the commitment (6, 9 or 12 years). Or a tax reduction of up to 6,000 euros per year. Since the start of 2023, the reduction had already been limited to 10.5%, 15% or 17.5% of the acquisition amount.
Reduction rates trimmed for the last year of Pinel
In 2024, the reduction rate drops further, now showing 9%, 12% and 14% depending on the duration of ownership of the property, before its outright deletion expected at the end of the year. As a reminder, these rates are those effective in the Metropolis. The Pinel for Overseas Territories (formerly Duflot Outre-Mer) takes the form of a tax reduction of 20%, 23% or 25% of the amount of the acquisition, always within a limit of 300,000 euros.
It is still possible to get very good deals on a Pinel device
Faced with this drop in tax reductions in mainland France, should we still rely on Pinel? Investors should not completely turn away from Pinel, because even if we lose a little in terms of tax reduction, it is still possible to make very good deals on a Pinel system, reveals Alexandra Nabet, wealth management consultant within the Expertalys firm. With the contraction of the real estate market, developers do not hesitate to make discounts on the sale price of properties. With some promoters, reductions of 20 or 30% can occur, which ultimately recovers the lost reduction rate.
New real estate: big discounts, free transfer rights… Developers are slashing prices
An opinion shared by Stphane van Uffel, wealth management consultant and general director of Netinvestment: Some promoters are experiencing difficulties. CDC Habitat buys lots, but for the developer it is 25 or 30% less on its margin. For the promoter, it is better to offer 15% or 20% to an individual. And this situation risks intensifying in 2024, since promoters will want to sell their Pinel before the end of the program. Taking advantage of the Pinel system would therefore still make sense, provided you find the right deal to save on the basic price of housing.
Pinel+, more expensive but more advantageous?
But another program exists, allowing you to benefit, even in 2024, from rates between 12 and 21%: Pinel+. Two types of housing are concerned: those located in priority districts of city policy or those which respect a level of quality higher than the regulations. In addition to exemplary environmental standards (meeting RE2020 criteria), these accommodations must, for example, provide a minimum living space (28m2 for a T1, 45m2 for a T2…), include private exterior spaces or even include two different orientations for accommodation of T3 and more.
Tax reduction is necessarily a parameter to take into account, but it is not the only important aspect of a real estate investment.
Standards which have a price, but also many advantages, affirms Stphane van Huffel: It is a type of property that is very easy to value for an investor. It is a property which costs more to purchase, but which will require little maintenance in the future, with very low charges for the tenant. Furthermore, as it meets the most stringent standards currently, it is a type of good which will never be taxed, never penalized as thermal strainers can be today.
For the investor, it is real security in terms of rental and relocation because we will perfectly comply with environmental regulations, concludes Alexandra Nabet. Tax reduction is necessarily a parameter to take into account, but it is not the only important aspect of a real estate investment. Above all, we must look at the project as a whole.