Still. Pinel’s law will change, so which device to choose for investment?

Extended for one year in its current form, ie until December 31, 2022, the Pinel rental investment scheme in new buildings will still be valid in 2023 and 2024, but with a gradually reduced tax advantage.

However, during these two years, investors will have access to Pinel +, which offers tax cuts similar to the original Pinel, but with much stricter eligibility criteria. If you want to invest, is it worth choosing another path, preferring the old one with the status of a non-professional furniture rental company (LMNP)? Or should we hurry to invest in Pinel in 2022? Elements of answers.

“Pinel +”: strict conditions of participation

The shortage of raw materials, exacerbated by the war in Ukraine, which leads to additional costs for construction and reconstruction of facilities, rising lending rates since the beginning of the year … Yields on rent are falling.

To this tense context is added from next year the prospect of reducing tax benefits under the Pinel Act. The current tax reduction rates of 12%, 18% and 21%, depending on the chosen lease term, will be gradually reduced from the beginning of 2023 to 10.5%, 15% and 17%. Then in 2024 by 9%, 12% and 14%.

To continue to benefit from lower taxes similar to the original Pinel, investors will have to turn to Pinel +. But the eligibility criteria for the latter will be more restrictive than today: housing must have a minimum area that meets the order of March 17, 2022. RE2020 environmental standards, ”says Martin Menes, President of Bevouac, a company that specializes in investing in old leases. This will lead to the fact that real estate is usually more expensive than me, according to this company.

LMNP: a more favorable system in large cities

Investors have another possible choice: to invest in old and rent their furnished property under the status of a non-professional furniture rental company (LMNP). The advantage of this mode is that it is flexible, as it allows the investor to prefer either depreciation of works and furniture when costs are high (due to the real mode), or prefer simplicity due to a fixed markup. 50% on rental income (on micro-BIC).

So, Pinel, Pinel + or LMNP?

“In most large cities, the LMNP scheme is often more cost-effective than the Pinel scheme,” says Bevoac. In addition, it is not subject to a tax loophole limit of € 10,000 per year in total. »

Take, for example, a 35 m2 property purchased under the new Pinel or Pinel + law for around € 193,000 and a € 40 LMNP under the actual regime for around € 151,000 after work, ie for the first property a price per m2 is € 5,519, and for the latter a price of € 3,769 after work (for these two acquisitions with a loan for 20 years at 1.5% at a contribution of approximately € 25,000): “From this comparison it follows that when using real LMNP debt is only 32.23%, and if repairs and ancillary costs (transfer fees, administrative costs…) are higher, the profitability is much better than in the case of Pinel (implemented before January 1, 2023) or Pinel + (implemented until January 1, 2025), where the debt reaches 34.31% “, – Bevoac’s analysis.

In the same example, a purchase between Pinel and Pinel + Pinel + wins in terms of tax exemption. Because “for Pinel, they will rise from 40,425 euros for an investment made in 2022 with a 12-year lease, to 33,688 euros if it is made in 2023, and up to 26,950 euros if it is made in 2024. a loss of € 13,475 in the form of a tax exemption for the same investment, ”comments Martin Menes de Beauvoir. Thus, Pinel + will be more profitable, as the tax increase will be 40,425 euros, provided that the apartment meets the known criteria for use.

“Whether you want optimal short-term profitability or net long-term profitability, you shouldn’t rush with Pinel in the current context. As for Pinel +, it will become more selective, which will tend to yield, he warns. Under these conditions, LMNP is a reasonable alternative. »