What is the Pinel Law?

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A measure to encourage rental investment
Created in 2014, the Pinel Law aims to encourage the construction of new rental housing in areas where demand is highest.
In exchange for a long-term rental commitment, the owner benefits from an income tax reduction, calculated according to the duration of that commitment.

This measure follows earlier schemes such as the Duflot Law or the Scellier Law, but stands out for its flexibility and the possibility of renting to family members, under certain conditions.

1. How the “Classic” Pinel Law works

The principle is simple:

• The investor buys a new or off-plan property (VEFA);
• They rent it out as a main residence for a minimum period;
• In return, they receive a tax reduction.

Tax reduction rates (mainland France):

• 12% for a 6-year commitment,
• 18% for 9 years,
• 21% for 12 years.

These percentages apply to the purchase price, up to €300,000 and €5,500/m².

2. Conditions to qualify

To benefit from tax advantages, several criteria must be met:

• The property must be new, off-plan (VEFA) or fully renovated.
• It must be located in an eligible area (zones A, A bis, or B1).
• Rent and tenant income must comply with government ceilings.
• The property must be rented unfurnished as a primary residence within 12 months of completion.

3. Advantages of the Pinel Law

✅ Significant and guaranteed tax reduction.
✅ Creation of lasting real estate wealth.
✅ Preparation for retirement with steady rental income.
✅ Possibility to rent to family members.

4. The Pinel Overseas Scheme

This version offers higher tax reductions (23%, 29%, 32%) to encourage construction in overseas territories, with similar conditions.
It can offer higher profitability, but requires good local market knowledge and careful management.

5. The Pinel+ Scheme

Since January 1, 2023, the Pinel+ replaces the classic version, keeping full tax benefits only for the most energy-efficient and comfortable homes (RE 2020 standard, outdoor space, proper orientation).
The classic Pinel will end completely in 2025.

6. Early resale risks

Selling before the end of the commitment cancels the tax benefit retroactively, except in cases of force majeure (death, disability, dismissal).

7. Keys to a successful Pinel investment

Choose a good location, a reliable developer, calculate real profitability, and plan the exit strategy.

In summary:
The Pinel Law — classic, overseas or Pinel+ — remains one of the most effective tools for investing in new property while reducing taxes.
Well-prepared, it can be both profitable and secure. Poorly anticipated, it may cause financial constraints.