Purchasing property using the Pinel Law remains an attractive and certain investment for 2019. Faubourg Immobilier examines the arrangements concerning this tax advantage for those that invest in new properties for rent.

A reminder of what the Pinel Law involves

Launched by the French government to replace the Duflot arrangements, the Pinel Law aims to develop the construction of new property in France. Investors benefiting from this are entitled to a tax reduction when buying new property, as long as it is up for rent for six years. Certain conditions must be respected:

Conditions concerning the income of the tenants;
Conditions concerning the maximum rent;
Type of property;
Construction deadlines;
Time of handover;
Heating and environmental rules (RT 2012) ;
Eligible areas.

Pinel Law: what’s new in 2019

In 2018, the Pinel Law applied to some cities where accommodation was a problem. This concerns areas where there were too few properties to rent, meaning rents and prices were high. In 2019, changes were made to the arrangements and they now concern zones A (2), A, B2 and C. There are some exceptions: communes benefiting from the renovation of “defence areas,” which involves areas where a large number of jobs have been lost and the economy and population are fragile after barracks have been closed. The latter in zone A, B1, B2 and C remain within the Pinel Law. Please visit the official government site for more information.

The 2019 tax law enables taxpayers carrying out a Pinel investment after 1^st January 2019  to benefit from the advantage if they move abroad during the period. Previously this limited the tax cut.

Pinel Investment and pay as you earn

Some good news for investors. 60% of the tax cut (instead of 30% as originally announced) was handed over at the start of the year. This advantage is usually based on the situation from two years ago, but because of the changes in tax arrangements in France was based on 2018. As for the remained (de 40%), it will be paid out in the summer.

NB: If the amount granted was more than the advantage obtained in 2019, a reimbursement will be made in September 2020.

Thinking of investing in property and taking advantage of the Pinel Law? Look at our programmes in the scheme on the Faubourg Immobilier website.