Investing in 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 state of future completion, makes it possible to optimize its taxation but it is also possible to benefit from tax advantages in the rental investment of old real estate.
The Pinel law system applies to investment in new rental property or in a state of completion: VEFA. This device replaces the Duflot law, and the previous device of the Scellier law. The application of the Pinel law depends on the geographic location of the property. Indeed, housing must be located in one of the areas of the law (municipalities 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 acquisition. Rents must respect a ceiling fixed by law between 8.69 euros and 16.83 euros per square meter. Tenants' income must be below a certain ceiling. The objective of the device is to facilitate access to housing for low-income households. The owner fulfilling the conditions of the law will be able to benefit from a variable tax reduction according to the duration of rental: 12% for a commitment of 6 years and 18% for a commitment of 9 years (possibility of extending the period up to 'at the age of 12). In the latter case, the relief is increased to 21%.
Old real estate can also benefit from a tax exemption system: the Malraux law. It is a program to encourage the renovation of dilapidated rental property. Owners of old dwellings renovating their property to rent it out later benefit from a tax reduction of up to 30% of the amount of the work. You must rent the property for at least 6 years and be located in a specific geographic area. The amount of work taken into account is limited to 100,000 euros and excludes certain expensive works such as demolition or reconstruction.