The scheme was due to end on December 31, 2021. (Photo credit: Fotolia)
As part of the finance bill for 2021, the deputies voted, on November 12 and 13, several amendments for the extension of the Pinel device until 2024, but with a gradual reduction of the tax advantage.
The Pinel tax system
The Pinel system allows taxpayers domiciled in France who acquire or build (directly or through the purchase of shares in SCPI) new homes to benefit from an income tax reduction. The tax reduction is 12%, 18% or 21% of the acquisition value (within the limit of 300,000 euros) depending on whether the rental commitment is six, nine or twelve years. To benefit from it, the investment must be located in a geographical area characterized by a significant imbalance between housing supply and demand. During the period covered by the rental commitment, the ceilings for rent and tenants’ resources must be respected, set according to the geographical area of the accommodation and its surface.
The device was due to end on December 31, 2021.
The Pinel device should be extended until 2024 but with a gradual reduction in the tax advantage
On November 12 and 13, the deputies then the government tabled and voted on amendments within the framework of the finance bill for 2021 (PLF 2021), currently at first reading in the National Assembly, to extend the device until 2024, but with a gradual reduction in the tax advantage.
In its amendment, the government highlights “the proven limits of the Pinel device to support the rental housing market” and calls for a reorientation of funding towards more effective means of action.
However, given the current economic context, he wishes to maintain the Pinel system until 2024, but with a “gradual reduction in 2023 and 2024, in order to organize the transition to a more efficient system”. The current operation would therefore remain unchanged until December 31, 2022.
For investments made in 2023, the tax reduction would be 10.5% for a rental period of 6 years and 15% for a rental period of 9 years.
For investments made in 2024, the tax reduction would be 9% for a rental period of 6 years and 12% for a rental period of 9 years.
He also proposes that the device remain unchanged until 2024 for housing located in priority areas of the city’s policy or which meet exemplary environmental standards.
At the same time, the government is working on a report “presenting alternative devices that are more efficient and less public money” which should be submitted to Parliament before March 30, 2021.