Theoretically, any taxpayer paying tax on the income may invest in Pinel. The point on the advantages and disadvantages of a real estate investment in Pinel.

buying real estate in the nine to rent, called device rental investment intermediary Pinel, is the best known of the plans for tax exemption. It is true that it offers a tax reduction important, but at the cost of several constraints.

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A real estate investment in Pinel, in force until December 31, 2021, in the taut areas and in the municipalities covered by a contract for the revitalisation of defence site active (we can see the common classified on the site of the CGET), entitles to a tax reduction graduated. It is calculated on the cost price of two dwellings at the most in a limit of 300 000 euros, and a ceiling per metre square of 5 500 euros, regardless of the location of the property.

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zoning changed

note : in the Finance law for 2018 has restricted the geographical scope of application of the device.

The operations of acquisition and construction located in the municipalities classified zones B2 and C are no longer eligible since 1 January 2018, in order to promote the construction in the areas with the most strained (zones A, A bis, and B1). However, in order to enable progressive output of the device Pinel of these municipalities, this provision does not apply to acquisitions of homes that have been the subject of the filing of an application for a building permit before December 31, 2017 and on the condition that the acquisition be completed later than December 31, 2018. For memory, the acquisition date corresponds to the signature of the public deed of purchase (promise to purchase, a unilateral promise of sale, promise of reciprocal sale or booking contract). Furthermore, the housing that the taxpayer made to build (for example a single house in the areas B2 and C) must be subject to the filing of an application for a building permit before December 31, 2017.

The amount of the tax reduction is going to depend on the duration of your rental commitment. The rate of the tax reduction is of 12% for six years, 18% for nine years, and 21% for twelve years. Thus, by investing € 300 000, your tax saving will be of € 63,000 to a maximum, distributed over a twelve-year lease. The first discount is given, the year of completion of housing purchased on a plan or in the year of acquisition if the property is already completed. If you want to get the tax reduction by 2018, it is thus necessary to acquire an apartment in a building delivered prior to December 31, 2018.

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As regards the taxation of your rental income, depending on the size of your deductible expenses and amounts collected, you will opt for the micro-foncier or the plan real. If your costs are low and that your rental payments do not exceed 15 000 euros, you would report your income property’s gross and the tax office will apply a deduction of 30% before tax for the balance with your other income.

Note: since January 1, 2018, the generalized social contribution (CSG) has increased by 1.7 percentage point, bringing the social contributions due on income from assets (and therefore your property income) from 15.5% to 17.2%.

If your earnings are higher and/or if your loads are important (especially due to borrowing), you will be filing a form n° 2044. You will deduct all of your expenses and will make a deficit in land that, if it is higher than your rent, will be charged the first year on your global income in the amount of 10 700€.

For those who pay several thousands of euros of tax

Theoretically, any taxpayer paying tax on the income may invest in Pinel. In fact, it is better to already be the owner of his main residence and/or have income taxed in the range of 30% to maximize the tax savings resulting from the tax reduction. In fact, if you have invested too much relative to your income, it may happen that your tax rebate exceeds your contribution to the Treasury. The balance that cannot be reported on the tax due in respect of the following years, you will be losing.

It is necessary to perform your calculations prior to your investment Pinel. If, for example, your annual tax amounts to 4 000 euros, there is no need to invest 300 000 € with a rental commitment of six years and a tax reduction of 12%. Your relief of tax on the entire period will be 36 000 euros (6 000 euros per year. But in reality, your tax reduction will not exceed € 24,000 (€4,000 over six years). You will not be able to take advantage of 12 000 euros of tax exemption, which greatly diminishes the interest of an investment Pinel.

it is Best to choose a much smaller economy to tax will be more in connection with your taxable income or to subscribe to shares of REITS Pinel, available for amounts far lower.

At least 3 000 euros per square meter for a beautiful purchase

That said nine, said high fares. Benefit equal to (standing and situation), the price of a new property can be from 20 to 50 per cent higher than asked for an old property. This is true everywhere, in all regions and in all the cities, whether small towns or cities. It will therefore be difficult to find a well correct at least 3 000 euros per square metre. To justifier, the proponents argue that the prohibitive cost of land and number of construction constraints, but they also rely on the carrot of tax to inflate their prices.

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It must, therefore, be extremely selective and demanding, and do not sign a reservation you just see a brochure or advertisement on the good word of your bank advisor or trade present in the salons of the estate. It is always necessary that you visit the site, assess the situation, the environment (shops, transport), the services provided, the rental market, the existence or non-existence of many new property developments completed or planned.

Opt for the major cities of the province. The prices there are lower than in the Île-de-France, the candidate tenants are many, especially in university cities, and you will have the choice between several programs. Avoid the newer areas of the suburbs towards the city centres or the common residential boundary. The price will be higher (3 500 to 4 000 euros per square metre) but the rental and the resale easier.

A term of the lease is flexible but value-uncertain

the advantage of The Pinel is to be more flexible than the system Duflot that preceded it. You are not obliged to choose from the beginning your commitment period of the lease. You can opt for six years and extend for two periods of three years. In the event of a vacancy (and therefore lack of tenant), you have one year to find a new tenant, but if you have trouble finding, renting an ascendant or a descendant, not attached to your home is possible without loss of the benefit of the tax advantage. It would therefore be appropriate to apply a market rent and not of convenience. Otherwise, the tax would endanger the entire operation.

As for the ceilings of rents, outside of the paris region, the Côte d’azur and the Geneva French, they are fairly consistent with the market price. But be careful, a system of add-on ” factor favors the small areas at the expense of large, which leads to privileging the property of less than 63 square metres. You need to be vigilant in relation to the levels of rents in the neighbourhood, and does not just rely on the amounts, ceilings, especially for calculating your performance. Similarly, if many apartments are available for rent at the same time, a difference of 10 euros monthly can give you a slight advantage to convince a tenant who has the choice.

In fact, the major handicap of an investment Pinel comes from the succession of similar plans in the last twenty years (Périssol, Besson, Robien, Borloo neuf, Scellier, Duflot). Result: there are already a plethora of new products on the rental market, where difficulties in finding occupants in some cities.

Another pitfall, there are many apartments put on sale by the end of the period for tax exemption who are struggling to find a buyer. Even if the promoters say the opposite, it is unlikely that you will realize a capital gain at the resale after six, nine or twelve years of the lease. All products Pinel will then be displayed in the agencies. It is therefore important to consider to keep your much longer (twenty years according to some experts) to hope to reap a profit.

Pinel overseas: not very cost-effective

If you are investing overseas in a time of Pinel, the income tax reduction to 23% for the first six years of rental, 29% if you rent for nine years and 32% for twelve years, always within the limit of eur 300 000. It is tempting but you must be careful. The ceilings of rents and resources of the tenants, which are different from those practised in france, does not have a downside because they remain fairly high. These are the goods proposed are the problem.

This article has been updated to the 5/03/18.

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Device Pinel

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They are very expensive and the quality is not always at the rendezvous. Above all, these buildings, which want of standing, are often inadequate to the local demand, the purchasing power is lower than in the Hexagon. To find the occupants, it should rent well below the ceilings, which strike the cost-effectiveness of your investment. Not to mention the resale. To sign with a buyer, it is common to sell at a price lower than the amount of your purchase!

This article has been updated to the 5/03/18.