Income Tax - Rental Investment Pinel/Duflot Law (tax reduction)

Verified 12 March 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Additional cases ?

Normandy Device

If you have made a rental investment, you can benefit from a tax reduction. The mechanism Pinel applies if the investment has been made since September 2014 and until 31 december 2024. The mechanism Duflot applies if it has been made 2013 to August 2014.

Pinel

You benefit from a tax reduction if you are fiscally domiciled in France and have made rental real estate investments. The so-called tax cut Pinel applies to investments made since September 2014 and until 31 december 2024. You must meet conditions related to the tenant and the rental.

You can prepare your investment with the following simulator:

Pinel/Duflot device calculator

Types of acquisitions

The tax reduction relates to the following properties:

  • New dwelling
  • Housing in the future state of completion
  • The housing you're building
  • Old dwelling undergoing renovation work (at least 25 % of the total cost of the operation).
  • Housing undergoing rehabilitation work
  • Premises converted into residential accommodation

Warning  

since 1er january 2021, the reduction relates to only dwellings located in a collective building. It no longer concerns individual and residential housing.

Time limits for housing completion

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Housing in the state of future completion

The dwelling must be completed within 30 months after the signature of the authentic act of acquisition.

Housing to be built

The housing must be completed within 30 months from the date of obtaining the building permit.

Housing under construction

The housing must be completed on 31 December of the 2nde year after the acquisition of the dwelling or premises.

Investment Period

The tax reduction relates to the transactions carried out between september 2014 and december 31, 2024.

Warning  

the tax reduction applies to a maximum of 2 dwellings per year.

Location of the accommodation

The dwelling must be in zone A, A bis or B1.

You can check the area in which your investment is located with a simulator:

Know the area of his commune: A, Abis, B1, B2 or C

FYI  

in BrittanyHowever, the Pinel reduction only applies to dwellings located in specific areas defined by the regional prefect.

Search for areas affected by the Pinel device in Brittany region

Level of energy and environmental performance

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Pinel + device

Since 2023, the Pinel + scheme applies to the following acquisitions:

  • Accommodation located in a priority area of city politics
  • Housing that respects a high level of quality

If you choose a high quality dwelling, you will have to meet several energy and environmental performance criteria.

Housing acquired in 2023

The Pinel+ scheme offers the same tax advantages as the classic Pinel before 2023, but housing must meet higher criteria.

Please note

If the housing acquired from 2023 does not meet the Pinel + criteria, the tax reduction rate is reduced.

You must acquire a new dwelling respecting use criteria and environmental criteria.

The criteria for use are as follows:

  • Minimum living area (e.g. 28 m2 for a one-room apartment)
  • Minimum surface area of private or privately enjoyed outdoor space (e.g. 3 m2 for a one-room apartment)

Housing must meet the energy and environmental performance thresholds of the RE 2020 standard (effective 2025).

For dwellings for which a building permit has been applied for before 1er January 2022, the environmental criteria shall be based on the ‘E+C-’ label and the ‘A’ label of the DPE: titleContent must be reached.

Acquired dwellings that do not result from a construction operation (e.g., refurbishment) must meet the EPD A or B label.

Housing acquired in 2024

The Pinel+ scheme offers the same tax advantages as the classic Pinel before 2023, but housing must meet higher criteria.

Please note

If the housing acquired in 2024 does not meet the Pinel+ criteria, the tax reduction rate is reduced.

You need to acquire a new home that meets usage and environmental criteria.

The criteria for use are as follows:

  • Minimum living area (e.g. 28 m2 for a one-room apartment)
  • Minimum surface area of private or privately enjoyed outdoor space (e.g. 3 m2 for a one-room apartment)

The energy and environmental performance criteria are as follows:

  • RE 2020 Thresholds (Effective 2025)
  • Class A of DPE: titleContent

For dwellings for which a building permit has been applied for before 1er January 2022, the environmental criteria are based on the ‘E+C-’ label and the EPD label A has to be met.

Acquired dwellings that do not result from a construction operation (e.g., refurbishment) must meet the EPD A or B label.

Other acquisitions

The dwelling must comply with an overall energy performance level depending on the type of purchase.

Tableau - Level of energy performance according to the type of acquisition

Type of dwelling

Required energy performance level

New or to be built

Thermal regulation RT 2012

(or BBC 2005 label in case of building permits filed before 2013)

Requiring work

Label HPE renovation 2009

or label BBC renovation 2009

The tenant may be your child or your parent provided that they do not belong to your tax shelter.

Sound reference tax income shall not exceed the regulatory ceilings.

Metropolis
Tableau - Maximum annual resources (2022 benchmark tax revenue) by geographic area - Lease concluded in 2024 - Metropolis

Composition of the tax household

Area A bis

Zone A

Zone B1

Zone B2

Area C

Single person

€43,475

€43,475

€35,435

€31,892

€31,892

Torque

€64,976

€64,976

€47,321

€42,588

€42,588

+ 1 dependent

€85,175

€78,104

€56,905

€51,215

€51,215

+ 2 dependants

€101,693

€93,556

€68,699

€61,830

€61,830

+ 3 dependants

€120,995

€110,753

€80,816

€72,735

€72,735

+ 4 dependants

€136,151

€124,630

€91,078

€81,971

€81,971

Surcharge per additional dependant

+ €15,168

+ €13,886

+ €10,161

+ €9,142

+ €9,142

Overseas
Tableau - Maximum annual resources (2022 benchmark tax income) by geographic area - Lease concluded in 2024 - Overseas

Composition of the tax household

Overseas Department (Dom)

Saint Martin's Day

Saint Pierre and Miquelon

French Polynesia

New Caledonia

Wallis and Futuna Islands

Single person

€31,589

€31,589

€34,369

Torque

€42,186

€42,186

€45,896

+ 1 dependent

€50,731

€50,731

€55,192

+ 2 dependants

€61,243

€61,243

€66,630

+ 3 dependants

€72,044

€72,044

€78,380

+ 4 dependants

€81,192

€81,192

€88,333

Surcharge per additional dependant

+ €9,063

+ €9,063

+ €9,859

Know the area of his commune: A, Abis, B1, B2 or C

The accommodation must be rented empty (unfurnished) as main dwelling.

It must be rented at the latest 1 year after the completion of the building or after its acquisition.

The minimum lease term is 6 years.

The monthly rent shall not exceed, excluding charges, the following ceilings:

Metropolis
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2023

2024

Area A bis

€18.25

€18.89

Zone A

€13.57

€14.03

Zone B1

€10.93

€11.31

Areas B2 and C (by approval)

€9.5

€9.83

Overseas
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2023

2024

Guadeloupe

€11.19

€11.65

Reunion

€11.19

€11.65

Mayotte

€11.19

€11.65

Guiana

€11.19

€11.65

Martinique

€11.19

€11.65

Saint Martin's Day

€11.19

€11.65

Saint-Pierre and Miquelon

€11.19

€11.65

French Polynesia

€13.56

€14.18

New Caledonia

€13.56

€14.18

Wallis and Futuna Islands

€13.56

€14.18

Rent ceilings vary depending on the size of the dwelling application of a multiplier.

The ceilings may be reduced to take account of the particularities of local rental markets.

Ceiling

The tax reduction is calculated on the cost price of up to 2 dwellings.

The total amount invested shall be retained within the following 2 ceilings:

  • €300,000 per taxpayer per year
  • €5,500 per m² of living space

You must also consider the overall cap on tax benefits.

Rate of tax reduction

The rate varies depending on the lease term.

For acquisitions made from 2023 onwards, the reduction rates will be gradually reduced.

However, the rates shall not be reduced for the following acquisitions (Pinel+ scheme):

  • Accommodation located in a priority area of city politics
  • Housing that respects a high level of quality

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Accommodation located in a priority area of the city's politics or which respects a high level of quality

Initial 6-year commitment
Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Rate

Allocation of the tax reduction

Initial period of 6 years

12%

2% per year

1re 3-year extension

6%

2% per year

2e 3-year extension

3%

1% per year

Initial 9-year commitment
Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Rate

Allocation of the tax reduction

Initial period of 9 years

18%

2% per year

3-year extension

3%

1% per year

Other acquisitions

Acquisition before 2023
Initial 6-year commitment
Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Rate

Allocation of the tax reduction

Initial period of 6 years

12%

2% per year

1re 3-year extension

6%

2% per year

2e 3-year extension

3%

1% per year

Initial 9-year commitment
Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Rate

Allocation of the tax reduction

Initial period of 9 years

18%

2% per year

3-year extension

3%

1% per year

Acquisition in 2023

If the dwellings do not comply with the criteria laid down in the Pinel + scheme, the tax reduction rates are reduced.

The rates are as follows:

Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Duration of the commitment

Rate

6 years

10.5%

9 years

15%

12 years

17.5%

Acquisition in 2024

If the dwellings do not comply with the criteria laid down in the Pinel + scheme, the tax reduction rates are reduced.

The rates are as follows:

Tableau - Rate of tax reduction based on the duration of the lease commitment (% of the amount invested)

Duration of the commitment

Rate

6 years

9%

9 years

12%

12 years

14%

FYI  

The rules are different overseas.

To fill your tax return, you can view the following documents:

Duflot

You benefit from a tax reduction if you are fiscally resident in France and you've done rental real estate investment, provided that conditions relating to the tenant and the rental. The tax cut, known as Duflotshall apply to investments made January 2013 to August 2014.

Types of acquisitions

The tax reduction relates to the following properties:

  • New dwelling
  • Housing in the future state of completion
  • The housing you're building
  • Old housing being renovated (which represent at least 25% of the total cost of the operation).
  • Housing undergoing rehabilitation work
  • Premises converted into residential housing.

Warning  

the tax reduction applies to a maximum of 2 dwellings per year.

Investment Period

The tax reduction relates to the transactions carried out January 2013 to August 2014.

Location of the accommodation

The dwelling must be in zone A or B1 at the time of the investment.

It may also be located in zone B 2 if there is a particular need for rental housing.

Since 1er in July 2013, this extension requires the issuance of a State approval.

You can check the area of your investment with this simulator:

Pinel/Duflot device calculator

Energy performance level

The dwelling must comply with an overall energy performance level depending on the type of purchase.

Tableau - Level of energy performance according to the type of acquisition

Type of dwelling

Required energy performance level

New or to be built

Thermal regulation RT 2012

(or BBC 2005 label in case of building permits filed before 2013)

Requiring work

Label HPE renovation 2009

or label BBC renovation 2009

Warning  

overseas, different rules apply.

The tenant cannot be your child or parent and must not belong to your tax shelter.

Sound reference tax income shall not exceed the regulatory ceilings.

Metropolis
Tableau - Maximum annual resources (2022 benchmark tax revenue) by geographic area - Lease concluded in 2024 - Metropolis

Composition of the tax household

Area A bis

Zone A

Zone B1

Zone B2

Area C

Single person

€43,475

€43,475

€35,435

€31,892

€31,892

Torque

€64,976

€64,976

€47,321

€42,588

€42,588

+ 1 dependent

€85,175

€78,104

€56,905

€51,215

€51,215

+ 2 dependants

€101,693

€93,556

€68,699

€61,830

€61,830

+ 3 dependants

€120,995

€110,753

€80,816

€72,735

€72,735

+ 4 dependants

€136,151

€124,630

€91,078

€81,971

€81,971

Surcharge per additional dependant

+ €15,168

+ €13,886

+ €10,161

+ €9,142

+ €9,142

Overseas
Tableau - Maximum annual resources (2022 benchmark tax income) by geographic area - Lease concluded in 2024 - Overseas

Composition of the tax household

Overseas Department (Dom)

Saint Martin's Day

Saint Pierre and Miquelon

French Polynesia

New Caledonia

Wallis and Futuna Islands

Single person

€31,589

€31,589

€34,369

Torque

€42,186

€42,186

€45,896

+ 1 dependent

€50,731

€50,731

€55,192

+ 2 dependants

€61,243

€61,243

€66,630

+ 3 dependants

€72,044

€72,044

€78,380

+ 4 dependants

€81,192

€81,192

€88,333

Surcharge per additional dependant

+ €9,063

+ €9,063

+ €9,859

Know the area of his commune: A, Abis, B1, B2 or C

The accommodation must be rented as main dwelling.

It must be rented at the latest 1 year after the completion of the building or after its acquisition.

The minimum lease term is 9 years.

The monthly rent shall not exceed, excluding charges, the following ceilings:

Metropolis
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2023

2024

Area A bis

€18.25

€18.89

Zone A

€13.57

€14.03

Zone B1

€10.93

€11.31

Areas B2 and C (by approval)

€9.5

€9.83

Overseas
Tableau - Monthly rent ceilings, per m², excluding charges, for leases concluded in mainland France

Location of the accommodation

Monthly rent ceilings per m²

2023

2024

Guadeloupe

€11.19

€11.65

Reunion

€11.19

€11.65

Mayotte

€11.19

€11.65

Guiana

€11.19

€11.65

Martinique

€11.19

€11.65

Saint Martin's Day

€11.19

€11.65

Saint-Pierre and Miquelon

€11.19

€11.65

French Polynesia

€13.56

€14.18

New Caledonia

€13.56

€14.18

Wallis and Futuna Islands

€13.56

€14.18

Rent ceilings vary depending on the size of the dwelling application of a multiplier.

The ceilings may be reduced to take account of the particularities of local rental markets.

Ceiling

The tax reduction is calculated on the cost price of the acquired dwelling.

The tax reduction is calculated up to the following 2 ceilings:

  • €300,000 per person per year,
  • €5,500 per m² of living space.

You must also consider the overall cap on tax benefits.

Rate of tax reduction

The rate is 18% the amount of the investment.

The tax reduction is spread over 9 years (2% per year for 9 years).

For example, for an investment of €300,000, the tax reduction is €6,000 per year [(18% x €300,000 /9].

FYI  

the rules are different overseas.

To fill your tax return, you can view the following documents:

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