Investing in a rental property allows you to benefit from tax exemption and pay less taxes.
The Pinel law (replacing the previous Duflot law) applying to new housing or in a future state of completion (VEFA) makes it possible to optimise its taxation but it is also possible to benefit from tax advantages in the rental investment of old real estate.
The use of Pinel Law applies to rental real estate investment new or in a future state of completion off-plan. This law replaces the Duflot Law and the previous Scellier law. The application of the Pinel law depends on the geographic location of the property. Indeed, the accommodation must be located in the areas specified by the law (in places where rental demand is very high). The property must be rented out as a main residence for a minimum period of 6 years following the purchase.
Rents must not exceed a fixed amount by the law between 8,69 euros and 16,83 euros per square metre. The income of the tenants must be below a certain amount. The objective of the system is to facilitate access to housing for low-income households.
The owner who meets the conditions of the law will benefit from a variable tax reduction depending on the duration of the rental : 12 % for 6-year commitment and 18 % for a 9-year commitment (possibility of extending the period up to 12 years)
Old real estate can also benefit from a tax exemption system : Malraux law. This is a program aimed at promoting the renovation of dilapidated rental property.
The owners of old housing renovating their properties to let them out later, will benefit from a tax reduction up to 30 % of the amount of the building work. The property must be rented out and be located in a specific geographic area. The amount of the building work taken into account is limited to 100 000 euros and does not include expensive work such as demolition or reconstruction.