The Pinel system, set up for the 2015 housing recovery plan, is a tool whose mission is to increase the creation of new housing.

The Pinel law is above all a tax exemption system and as such, it offers a tax advantage to each French taxpayer who wishes to invest in a new property and who undertakes to rent it for a minimum period of 6 years with the possibility of extend it by twice 3 years, i.e. a period of 9 years then a maximum period of 12 years.

obviously, the longer the term, the greater the tax benefit. The percentage of tax deduction is proportional to the rental commitment made.

Let's see in detail what this device offers.

What are the advantages of the Pinel law?

  1. The tax reduction is 12% of the amount of the investment over 6 years
  2. The tax reduction is 18% of the amount of the investment over 9 years
  3. The tax reduction is 21% of the amount of the investment over 12 years
  • A Pinel reduction rate can go up to 21%
  • Notary fees can be reduced (around 2%)
  • The Pinel law also allows you to make a maximum of 2 acquisitions per year within the double limit of € 300000 and € 5500 per m².

The tax reduction is 2% per year from the 1st to the 9th year. An extension option gives the right to a tax reduction of 1% per year from the 10th to the 12th year.

Pinel law example:

For an investment of 300 000 € over 12 years, the total tax reduction is 63 000 € or,  €6000 per year for 9 years and €3000 per year for the additional 3 years.

For an investment of 200 000 € over 6 years, the tax reduction is 24 000 € or,  €4000 per year for only 6 years.

The Pinel law is a great way to become the owner of your home without contribution. Indeed, in this type of project, banks are more inclined to lend money for a project supported by the government and having a lower risk than other real estate or financial investments. This is also the opinion of professionals in the sector.

A way to start building wealth effortlessly thanks to tax savings, or even increase it if you are already a homeowner. This will allow you to prepare for your retirement and the future of your children if you have any, a way to protect your family against the vagaries of life.

The conditions for benefiting from the Pinel law

Rental conditions

  • The owner is required to rent the accommodation as the main residence of a tenant
  • The minimum rental period is 6 years
  • The accommodation must be rented within 12 months of delivery of the property
  • The owner agrees to respect the rent and resource limits of the tenants

The conditions for obtaining tax exemption

  • The Pinel tax reduction cannot be combined with the Duflot, Scellier, Censi-Bouvard, Malraux, or historical monument laws
  • The Pinel system is affected by the capping of tax loopholes set at € 10 per year

Which accommodation is eligible for the Pinel law?

  • New housing, in the future state of completion (VEFA)
  • The construction of a home
  • The acquisition of unfinished housing with a view to its completion
  • Subscription to the capital of SCPI

Can investing in Pinel be a scam?

For some, the Pinel law can turn out to be a nice scam spawned by the state.

The disadvantages of Pinel

  • You don't know how the building will age
  • A savings effort will be required (pay every month in addition to the loan)
  • You will receive the rents at the end of the loan, because it is bad debt
  • Purchase price 20-30% above market price
  • You don't know what will become of the neighborhood
  • As stated above, rents are capped

Here is an example which will show you that even with the tax reduction, the Pinel device can quickly no longer become profitable.


For an investment of 300 000 €, the real market price is 210 000 €, because the good is 30% more expensive. The difference which is 90 000 €, completely erases the tax reduction of 63 000 €.

The investor who believes he has a tax reduction of 63 000 € has actually 27 000 € to pay more. The mere fact of paying 30% more than the market for his property eliminates the main advantage of this device.

Then, an investment must pay a profit as soon as the tenant is in place. Only with this Pinel device, we must first lose money via the capped rent and the savings effort. It is only after the loan has been repaid that the investor will start to profit from it.

For an investor who seeks to develop a substantial real estate portfolio and have comfortable alternative income, these tax exemption tools should be avoided for all the reasons mentioned above, but also by the fact that by having to make a savings effort, you will not be able to accumulate real estate investments.

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