Invest in Pinel today to lower your taxes in 2023

Today, investing in rentals allows you to reduce taxes when building a real estate portfolio. If some services are very attractive, be careful not to make a mistake, a bad choice can cost you dearly.

Another six months to cut taxes next year

The arrival of summer is a sign that 2022 is already halfway there. So from a tax standpoint, you still have a few months to figure out the best way to cut your taxes in 2023 based on your income in 2022. In practice, while there are many solutions, real estate is and always will be an effective weapon. in tax cuts.

The Pinel law, in force since 2015, is in line with the Chelier law and the Duflo law. This law is required if you have a new rental investment project due to the benefits it offers. It refers to an incentive method that mainly supports the construction of real estate through rental investment.

The Pinel tax rebate is available to owners who agree to rent out their property for at least 6 years at below market rates. More precisely, 20% lower than the rates practiced in the industry. Housing must also meet other criteria that are often considered real investment restrictions.

However, this investment allows you to benefit from an income tax reduction of 12% for 6 years of rent, 18% for 9 years and 21% for 12 years, depending on the purchase price of your property. work performed if the property has been renovated.

According to the Pinel law, your investment in real estate must not exceed 300,000 euros per year for a taxable family and 5,500 euros per square meter. This means that purchases of €300,000 are zero-rated up to €63,000.

The law then allows you to become a landlord without paying any fees, meaning that your purchase will be reimbursed thanks to the monthly rent paid by the tenant. Under the Pinel law, you can also rent out property to your descendants or descendants.

Tips for Avoiding Mistakes in 2022 with Pinel’s Law

If you only consider Pinel’s law as a means to declare deductible costs and expenses in order to benefit from tax credits, you are on the wrong track. While rental investments offer certain tax advantages, they are also long-term investments. This includes designing yourself for a long time and collecting a lot of information.

The most common and destructive mistake many investors make when buying property is planning without taking the necessary steps. To avoid unpleasant surprises, it is important to have an external and objective opinion.

Since this is a big project first and foremost, you will need to rely on relevant advice. Do not choose the location of your property without taking into account all objective, neutral and cold criteria. First of all, you need to make sure that the market you are investing in is a high demand sector.

Please note that the Pinel system will be developed in 2023 and 2024. From January 1, 2023, the current Pinel system will be replaced by the reduced rate Pinel system and the Pinel+ system. Each will be subject to different conditions.

In both cases, the tax deduction will always depend on the duration of the lease obligation as well as the DPE (energy efficiency diagnostics) of your investment. Thus, in 2023, only real estate of at least B class (according to RE2020 criteria) will be eligible for a tax deduction.

For the best resale prospects, prioritize human scale programs. For example, a small condominium of 40-50 apartments or detached houses, in the medium term, there will be less real estate comparable to yours.