Patel: good law to no longer pay d´impots

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Pinel housing example
Pinel housing example

 

Pay you too much d´impots? Annual € 3,000 more? I can find the solution by investing in l´immobilier new and old through the Patel law.

Pinel Act replaces the Duflot Act for investment (see the list of existing investments) as of September 1, 2014. She reviews the Duflot Act 3 major characteristics. First investors may choose the length of their commitment: 6 or 9 years with possibility of renewal up to 12 years. They can rent the accommodation acquired from 1 January 2015 to their ascendants or descendants under certain conditions and finally the tax advantage for civil societies in real estate investment (SCPI) is aligned with that of individuals. Which means qu´il are the SCPI Pinel.

Sylvia Pinel
Sylvia Pinel

Be aware that the law is extended to 2017

This tax is extended until the end of 2017. The president of the Republic also announced Friday an extension of the VAT rate reduced to further accelerate the recovery of the real estate market. The Pinel will keep its name (instead of the lug Act).

Sommaire

Invest through Pinel law: objectives

Invest in Pinel Act to meet 4 objectives:

  • benefit from an attractive taxation
  • make a rental investment without input,
  • prepare his retirement,
  • to build a real estate,
  • protect his family with l´assurance ADI (death disability insurance) of the credit

If you are not in debt and you pay between 2000 and 3000 euros in taxes per year or more, you can normally enjoy the Pinel tax exemption.

If l´etat allows you to do this, then c´est qu´il a l´interet. Indeed when the building goes, everything goes. The Government therefore wishes to revive the sector, because an investment real estate c´est for him to d´argent (tax d´habitation) receipts. Two unemployed and half less and VAT work etc

Need more d´information?

A maximum of €63.000 of reduction of tax over 12 years

Through the Patel law you can reduce your taxes by 12% / 18% or even 21% of the amount of your investment over 12 years.

To be exact the law allows to reduce:

  • 12% of the value of the real estate purchase for a commitment of 6 years, within the limit of €36,000;
  • 18% of the value of buying real estate for a commitment of 9 years, within the limit of €54 000;
  • up to 21% of the value of buying real estate for a total commitment (initial + extension) 12 years, within the limit of €63.000.
Rate of tax reduction from September 2014, according to the duration of the rental commitment
Duration rental Rate Distribution of the tax reduction
Initial 6 year commitment Initial period of 6 years 12% 2% per year
1st 3-year extension 6% 2% per year
2nd 3-year extension 3% 1% per year
Initial commitment of 9 years Initial period of 9 years 18% 2% per year
3-year extension 3% 1% per year

 

A d´impots deduction the land deficiency of common law

The credit interests are deductible from the tax revenues as well as costs appendices (death disability insurance related to the contract and, under certain conditions, fees). Loan interest deduction is capped at the amount of rental income annually.

 

D´autres expenses are also deductible:

  • Management costs: deduction of management including the remuneration of the custodian fees, if applicable, in proportion to the part of the owner.
  • Work: deduction of repair, maintenance or improvement, without limitation of amount, apart from the non-deductible construction or expansion.
  • Land tax: deductible in full.
  • Insurance premiums: deductible amount for real.
  • These 'other charges' deduction is capped at EUR 10 700 on the total gross income.

The limits of the tax benefit of the Act Pinel

The tax reduction granted under the Pinel device is limited to a maximum of 2 investments per year within the limit of a total amount of €300,000 per year; with a ceiling of maximum purchase of €5.500 / m2 but cela concerns especially the Parisians.

 

For old housing to rehabilitate, the limit of €300,000 per year includes the purchase price of housing increased the cost of the work performed.

 

Conditions of the Patel real estate law

To enter under the Patel law, the property must be acquired between September 1, 2014 and December 31, 2016.

As you doubt, to obtain the tax benefit is also subject to conditions such as:

  • investment in specific areas,
  • respect for environmental standards (thermal to be more precise),
  • implementing rental with a capped rent,
  • implementation not furnished rentals
  • respect of the ceilings of resources of tenants,
  • A purchase of apartment via the Patel law may not exceed €10.000 tax per year reduction because this Act is part of tax loopholes,
  • It is not possible to combine the Pinel laws with further cuts as DUFLOT, MALRAUX, GIRARDIN, etc.

 

Nine real estate purchasing

For the Patel law, it is possible to build in the nine in the following cases where the:

  • housing is purchased new,
  • housing is a sale in the future state of completion VEFA
  • It s´agit d´un housing that you build.

It is possible to the Pinel in l´ancien in some cases. For example if it s´agit d´un former housing covered by work to be turned into new housing. Second you can also transform a housing do not meet the characteristics of decency and the subject of rehabilitation. In third s´il s´agit local d´un assigned to one purpose other than housing and subject to alterations in housing

To qualify for Pinel operative, old or dilapidated dwellings must meet, in addition to the conditions of the Pinel device for new housing, to certain conditions:

  • Before the completion of the work, former housing should not respond to the decency characteristics listed in article 6 of Act No. 89-462 of 6 July 1989 and shall not meet the technical performance of the law n ° 86-1290 of December 23, 1986.
  • After the completion of the work, former housing must be able to meet the conditions to qualify for the label high performance energy renovation 2009 (HPE renovation 2009) or building low energy renovation 2009, (BBC 2009 renovation).

However it y of deadlines in the context of the purchase of a housing rehabilitation, the rehabilitation work to be completed more than 31 December of the second year following the purchase of the real estate.

The situation of the real estate

The real estate, or to rehabilitate, nine must lie within areas corresponding to the areas where the rental request is supposed to be the strongest. Zoning is done by l´etat. A new zoning came into effect as of October 1, 2014:

  • area: 650 Commons such as the municipalities of greater Paris, the Cote d'Azur, the french Genevois and the Lyon conurbation.
  • bis box: 77 municipalities including Paris, communes of Yvelines, Hauts-de-Seine, Seine-Saint-Denis, Val-de-Marne and the Val-d'Oise.
  • area B1: 1 546 agglomerations of more than 250,000, great Crown around Paris, Annecy, Bayonne, Chambéry, Cluses, La Rochelle, Saint-Malo, edge of the Côte d'Azur, overseas departments, Corsica;
  • area B2: agglomerations of more than 50,000 inhabitants, border areas or coastal dear, limits of the île-de-France.

Accommodation available in the B2 area are eligible only if the commune was the subject of an approval issued by the prefect of the region.

Good to know: the list of Commons allocated to zones A, A, B1, B2 and C is available in the order of 01/08/14 available on the official website at this address.

Pinel areas
Pinel areas

Turnaround time of housing

The accommodation shall be completed by the following deadlines to qualify for the discount:

Maximum time for completion of the accommodation according to the type of acquisition
Type of acquisition Time for completion of the accommodation
Housing in the State of future completion 30 months from the opening of the
Housing building 30 months from the date of obtaining the building permit
Housing covered by work 31 December of the 2nd year after the acquisition of the dwelling or the local

Rental periods

The housing must be rented main tenancies.

It must above all be rented no later than 1 year after the completion of the building, or its acquisition if it is later.

The minimum duration of the rental commitment is as follows:

  • 9 years for an investment made before September 2014
  • From 6 to 12 years for an investment realized from September 2014

 

Conditions of resources of the tenant in 2015

The lessee shall not be a member of your household.

The tax income of the tenant reference must not exceed certain limits

Annual ceilings for resources – lease in 2015 (reference of 2013 tax income) – metropolis
Composition of the home of the tenant Bis box Area A Area B1 Area B2
Single person €36 971 €36 971 €30 133 €27 120
Couple €55 254 €55 254 €40 241 €36 216
Pers. single or couple with 1 pers. to load €72 433 €66 420 €48 393 €43 554
Pers. single or couple with 2 pers. to load €86 479 €79 558 €58 421 €52 579
Pers. single or couple with 3 pers. to load €102 893 €94 183 €68 725 €61 853
Pers. single or couple with 4 pers. to load €115 782 €105 985 €77 453 €69 707
Increase per person at additional charge €12 900 €11 809 €8 641 €7 775

 

Rent Cap

The rents should also be capped during the duration of rental. The amount of the ceiling varies depending on the geographic area where the housing.

Ceilings for rents 2015 in metropolitan France.
Bis box Area A Area B1 Area B2
Ceiling of rents in € per m2 16.82 12.49 10.06 8.74

These rent ceilings are adjustable according to the size of the housing with the application of a multiplier. This multiplier coefficient is obtained by the following calculation: 0.7 + 19 / living area of housing. The coefficient is then rounded to the nearest 2 decimal places and can not be greater than 1.2.

Example of the Pinel tax reduction

You buy a property worth € 285 000 in Paris metropolitan area (area A), an area of 70 m² and 3 parts. You set this property to rent with a rent of €800.

6-year lease commitment

You can benefit from a tax reduction: 285 000 × 12% = €34 200. This tax reduction is distributed over 6 years.

Each year you can benefit from a €5 700 tax less.

 

9-year lease commitment

You can benefit from a tax reduction: 285 000 × 18% = €51 300. This tax reduction is spread over 9 years.

Each year you can benefit from a €5 700 tax less.

Extension of the commitment to hire up to 12 years

If you're engaged you on 6 years and you decide to extend your investment over 2 periods of 3 years, reduction of tax corresponding to:

  • 285 000 x 12% = €34 200
  • + 285 000 x 6% = €17 100
  • + 285 000 x 3% = €8 550
  • = €59 550

If you're engaged you on 9 years old and you decide to extend your investment of 3 additional years, reduction of tax corresponding to:

  • 285 000 x 18% = €51 300
  • + 285 000 x 3% = €8 550
  • = €59 850

You get:

  • €5 700 less 6 or 9 first tax years;
  • €2,850 least 3 tax years.

Good to know: you must commit yourself to rent housing to tenants whose resources do not exceed the limits defined for zone A.

 

A tax reduction of 12% over 6 years

For the purchase of a property in law Pinel to €200,000. The tax reduction is €24 000 on 6 years or a reduction of €4,000 per year.

A tax reduction of 18% over 9 years

For the purchase of a property in law Pinel to €150,000 tax reduction is € 27 000 over 9 years a reduction of €3,000 per year.

A tax reduction of 21% over 12 years

For the purchase of a property in law Pinel € 300,000 tax reduction is of €63.000 over 12 years a discount of €5 250 per year.

Example of Pinel funding

You invest €285 000 in a housing with a 9-year lease commitment:

  • You benefit from a tax reduction of €51 300.
  • You receive a rent of €800 per month over 9 years, the tenant pays you in any €86 400.
  • The tax reduction and the rents allow you to touch €137 700, over 48% of the purchase price.
  • Result: after 9 years, housing cost you €147 300 (plus notary fees).

Graphic example that pays what:

Pinel effort
Pinel effort

Blogs:

The practical arrangements of the device are laid down in the general code of taxes (CGI), in particular in the following articles:

The conditions of application are laid down in sections 46 AZA g et seq. of annex 3 of the general tax code, whose provisions were amended by Decree No. 2015-503 may 4, 2015.

 

6, 9 or 12 years?

It is now advisable to take an initial period of 6 years. It is indeed likely nothing to do since it remains possible to extend the device for two periods of 3 years and enjoys a 21% reduction in total. A taxpayer having opted for 9 years and which would be obliged to resell in the seventh year of investment should return to the Exchequer all of the tax cuts. However if he opts for 6 and prolongs it must to catch that up 1.

References of periods (legal text of legifrance, the official website of the laws)

VII bis.-A.-A the end of the period covered by the commitment of rent specified in the I, when housing is rented per three-year period under the conditions provided for in III, the taxpayer may continue to benefit from the tax reduction provided for in this article, on the condition to extend its original commitment for at most:

1 ° three years, renewable once, if the rental commitment I mentioned in was for a period of six years. In this case, the tax reduction is equal to 6% of the cost of housing, referred to the A of V, for the first three-year period and 3% for the second triennium;

2 ° three additional years, if the rental commitment I mentioned in was for a period of nine years. In this case, the tax reduction is equal to 3% of the cost of housing, referred to in A of V for this triennium.

Why acquire credit?

Rates are low at the moment, around 2%. Need to borrow and invest this money allowing you several important things:

  • Financial leverage, your performance is higher than the rental price must do this and put your savings.
  • To the risk, indeed you place all your savings in your Pinel.
  • You get the nod that protects your family.
  • Do not take a variable rate, they will necessarily go up.
  • The credit interests are deductible from tax revenues.

Should I deliver l´argent every month?

 

Yes

ATTENTION if you go through a promoter real estate c´est you fill in obligatory documents

 

Do not believe if you go to the notary buy you one Pinel, not just a quite normal. To buy a Patel will have to declare it as such.

The rental commitment (declaration 2044-EB)

 

This document, to complete during your first tax return Pinel, allows to certify to the IRS that you are committed to rent your property for at least 6 years (6.9 or 12 years).

The land balance sheet (statement 2044 2044-SPE or)

 

The land balance of the operation (rents received less costs, charges, and taxes) allows to reveal a total positive (land profit) or negative (land deficit). This will come to add or subtract to your overall taxable income.

 

The land balance is most often done by your manager, your trustee, your wealth management Advisor, real estate consultant or by yourself (with your statements of managers).

Reporter the land balance sheet (statement 2042 – topic "property income")

Where your property is negative, it will then come to be utilised on your overall income. This will allow you to withdraw your taxable income. At this first decrease will come to add the Pinel tax reduction. €10700 / year limit.

The tax benefit of the Act Pinel (statement 2042-C)

The annual tax savings allocated by Pinel operative must be reported under the heading "right opening charges to tax reduction". This corresponds to 21% of the cost (included notarial expenses) divided by 12 in the case of a twelve-year investment.

L´investisseur must have the following original documents:
The certificate of declaration of completion (DAT)
The leases of different tenants who occupied their housing

All of these forms are available on the official website of taxes.

 

Conclusion:

This is how the Patel law works, but you can also see my article on law issues Pinel. Remember to finish qu´il exists a Pinel overseas.

 

Make an appointment

 

Pinel act frequently asked questions

 

The depopulation of certain areas is a statistical reality according to l´INSEE
The depopulation of certain areas is a statistical reality according to l´INSEE

Here is a list of frequently asked questions that are asked on the Patel law. All the answers in this article for you exclusively on my website.

 

From what tax am I concerned?

To invest in Pinel and that this is interesting for you, you still have.

The amount of your income tax is therefore a criterion essential to take into account in determining if the Patel law is made for you.

From 2000 Euros of taxes (income) per year, it is likely that Patel law represents an opportunity for you.

If you pay less, for example 1500 euro per year, all depends on the context:
-have you already purchased your principal residence?
-are you a thrifty natural?
-are you single or in a relationship?
-with dependent children?
etc…

The opportunity to invest or not is decided case by case.

You should also know that your debt ratio must not exceed 30%.

If you are not in debt and you pay between 2000 and 3000 euros in taxes per year or more, you can normally enjoy the Pinel tax exemption.

What is the debt ratio and how is it calculated?
The debt ratio determines your ability to finance the purchase of real estate through a loan.
It allows to assess the monthly budget you can devote to this purchase.

To know your debt ratio, which is useful to know if a Pinel investment is right for you, use the following formula:


your debt ratio = (the sum of all of your monthly charges / the sum of all of your monthly income) * 100

Attention if you are hosted free of charge the Bank will add you virtual rent as load.

Is it possible to rent to her parents?

Yes, Pinel défiscalisation device allows you to rent your ascendants while benefiting from a tax reduction.

If your parents have a small pension and if they are not owners of their principal residence, it is maybe for you a solution to help them while paying less taxes.

If you're highly taxable, invest in a new home and then their rent under the Patel law will benefit both parties. A provided of course to be on good terms with them because your parents will become your tenants what is the best way to argue.

Is it possible to rent to her children?

Yes Pinel défiscalisation device allows you to rent your descendants while benefiting from a tax reduction.

However your children should not be in your tax home

How to avoid a scam

It depends on if you the made yourself or by counsel.

Personally I work with a group (IFB to quote) that make me analyses and will see on-site property, they have a more that s´appelle detailed l´immobilier with an analysis laboratory (j´y leaves half of my commission and I'm a cheapskate so I pay for good service).

I want the 100% sure

Our day if you want of on 100%, first c´est ca n´existe illusion not risk 0. In addition the without risk c´est without yield, take calculated risks.

Insurance l´arnaque c´est

Insurance is there to protect you in case of problems, indeed the aim c´est also do a turnkey investment.

There are deductibles on your insurance

Yes indeed, there are still, especially on the duration from which they compensated if it n no tenants. But in general they are sufficient to cover you a good time. I recommend d´ailleurs to legal protection + insurance unpaid rent and breaks that often go together. It is clear that if a tenant does not pay, it breaks and it is necessary to l´expulser, c´est for this.

I prefer l´ancien

I understand, but be aware that for a tenant rents are the same in the new and l´ancien except qu´un tenant will still prefer the nine with thermal standards, parking etc.

I prefer my region (Picardy, moselle etc)

It is certain that pass its good is reassuring and in case of problems you can go see. However it y a big disadvantage, areas not France dépeuples and any half North goes south, watch yourself analysis l´INSEE, it n there was no picture.

What happens in the event of death for my Pinel investment?

C´EST almost the best case (good murky c´est) but in this case your family doesn't pay nothing because your property is guaranteed by your loan.

The depopulation of certain areas is a statistical reality according to l´INSEE
The depopulation of certain areas is a statistical reality according to l´INSEE

Here is a list of frequently asked questions that are asked on the Patel law. All the answers in this article for you exclusively on my website.

 

From what tax am I concerned?

To invest in Pinel and that this is interesting for you, you still have.

The amount of your income tax is therefore a criterion essential to take into account in determining if the Patel law is made for you.

From 2000 Euros of taxes (income) per year, it is likely that Patel law represents an opportunity for you.

If you pay less, for example 1500 euro per year, all depends on the context:
-have you already purchased your principal residence?
-are you a thrifty natural?
-are you single or in a relationship?
-with dependent children?
etc…

The opportunity to invest or not is decided case by case.

You should also know that your debt ratio must not exceed 30%.

If you are not in debt and you pay between 2000 and 3000 euros in taxes per year or more, you can normally enjoy the Pinel tax exemption.

What is the debt ratio and how is it calculated?
The debt ratio determines your ability to finance the purchase of real estate through a loan.
It allows to assess the monthly budget you can devote to this purchase.

To know your debt ratio, which is useful to know if a Pinel investment is right for you, use the following formula:


your debt ratio = (the sum of all of your monthly charges / the sum of all of your monthly income) * 100

Attention if you are hosted free of charge the Bank will add you virtual rent as load.

Is it possible to rent to her parents?

Yes, Pinel défiscalisation device allows you to rent your ascendants while benefiting from a tax reduction.

If your parents have a small pension and if they are not owners of their principal residence, it is maybe for you a solution to help them while paying less taxes.

If you're highly taxable, invest in a new home and then their rent under the Patel law will benefit both parties. A provided of course to be on good terms with them because your parents will become your tenants what is the best way to argue.

Is it possible to rent to her children?

Yes Pinel défiscalisation device allows you to rent your descendants while benefiting from a tax reduction.

However your children should not be in your tax home

How to avoid a scam

It depends on if you the made yourself or by counsel.

Personally I work with a group (IFB to quote) that make me analyses and will see on-site property, they have a more that s´appelle detailed l´immobilier with an analysis laboratory (j´y leaves half of my commission and I'm a cheapskate so I pay for good service).

I want the 100% sure

Our day if you want of on 100%, first c´est ca n´existe illusion not risk 0. In addition the without risk c´est without yield, take calculated risks.

Insurance l´arnaque c´est

Insurance is there to protect you in case of problems, indeed the aim c´est also do a turnkey investment.

There are deductibles on your insurance

Yes indeed, there are still, especially on the duration from which they compensated if it n no tenants. But in general they are sufficient to cover you a good time. I recommend d´ailleurs to legal protection + insurance unpaid rent and breaks that often go together. It is clear that if a tenant does not pay, it breaks and it is necessary to l´expulser, c´est for this.

I prefer l´ancien

I understand, but be aware that for a tenant rents are the same in the new and l´ancien except qu´un tenant will still prefer the nine with thermal standards, parking etc.

I prefer my region (Picardy, moselle etc)

It is certain that pass its good is reassuring and in case of problems you can go see. However it y a big disadvantage, areas not France dépeuples and any half North goes south, watch yourself analysis l´INSEE, it n there was no picture.

What happens in the event of death for my Pinel investment?

C´EST almost the best case (good murky c´est) but in this case your family doesn't pay nothing because your property is guaranteed by your loan.

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