Real. Pinel’s law will evolve, so which device to choose for investment?

Extended by one year in its current form, i.e. until December 31, 2022, the Pinel Leasing Investment Scheme in New Buildings will continue to exist in 2023 and 2024, but with a gradually decreasing tax advantage.

However, during those two years, investors will have access to the “Pinel+” program, which offers tax cut rates similar to the original Pinel program, but with significantly stricter eligibility criteria. If you want to invest, should you choose a different path, preferring the old one with the status of a non-professional furniture rental company (LMNP)? Or should we rush to invest in Pinel in 2022? response elements.

Pinel+: strict conditions for participation

Lack of raw materials, exacerbated by the war in Ukraine, leading to additional costs for the construction and repair of facilities, growth in lending rates since the beginning of the year … Rental income is falling.

Added to this tense context from next year is the prospect of a reduction in tax benefits under the Pinel law. The current tax rates of 12%, 18% and 21%, depending on the length of the lease chosen, will gradually decrease from the beginning of 2023 to 10.5%, 15% and 17%. Then in 2024 by 9%, 12% and 14%.

To continue to benefit from tax cuts similar to the original Pinel, investors will have to turn to Pinel+. But the eligibility criteria for the latter will be stricter than today: dwellings must have a minimum surface area in line with the March 17, 2022 decree. RE2020 environmental regulations,” says Martin Menez, president of Bevouac, a rental investment company specializing in old homes. According to this company, this will cause the price per m² to tend to be more expensive.

LMNP: more profitable system in large cities

Investors have another possible choice: to invest in old and rent furnished properties as a non-professional furniture rental company (LMNP). This regime has the advantage of being flexible, as it allows the investor to either opt for depreciation of works and furniture when costs are high (thanks to the real regime) or opt for simplicity through a flat markup. rental income (per micro-BIC).

So, Pinel, Pinel+ or LMNP?

“In most major cities, the LMNP scheme is often more financially beneficial than the Pinel scheme,” says Bevouak. In addition, it is not subject to the tax loophole cap of €10,000 per year in general. »

If we take as an example a property of 35 m² bought new under the law by Pinel or Pinel + at a price of about 193,000 euros, and 40 m² through LMNP in actual mode worth about 151,000 euros after completion of the works, that is, for the first property, the price is m² in the amount of 5,519 euros, and for the second, the price per m² in the amount of 3,769 euros after completion of the works (for these two acquisitions with a loan for 20 years at 1.5% and an installment of about 25,000 euros): “From this comparison follows that when using real LMNP, the debt is only 32.23%, and if the repair and ancillary costs (transfer fees, administrative costs …) are greater, the profitability is much better than in the case of Pinel (carried out before January 1, 2019). 2023) or Pinel+ (running until January 1, 2025) where the debt reaches 34.31%,” Bevouak’s analysis.

In this same buying example, between Pinel and Pinel+, it is Pinel+ that wins in terms of tax exempt profits. Because “for Pinel they will increase from €40,425 for investments made in 2022 with a 12-year lease obligation to €33,688 if they are made in 2023 and to €26,950 if they are made in 2024. loss of 13,475 euros in tax exemption for the same investment,” comments Martine Menez de Bevouac. Thus, Pinel+ will be more profitable, as the tax profit will be 40,425 euros, provided that the housing meets the known usage criteria.

“Whether you want optimal profits in the short term or net profits in the long term, you should not rush Pinel in the current environment. As for Pinel+, it will become more selective, which will affect yields, he warns. Under these conditions, LMNP appears to be a reasonable alternative. »