Pinel: New-Build Letting in the Intermediate Rental Sector
The Pinel scheme (CGI Art. 199 novovicies) is a personal income tax reduction for private individuals who purchase new or off-plan residential property — or property they build — and commit to letting it unfurnished as the tenant's principal residence at a rent below market level and within statutory ceilings, for a minimum period of six years. It ran from 1 January 2013 to 31 December 2024. Investments made before that closing date retain their reduction for the duration of the commitment.
Eligible investment and property types
Pinel applies to: new or off-plan (VEFA) residential housing; housing that the investor causes to be built; premises converted into residential use; rehabilitated housing achieving the same energy performance standards as new housing; and subscriptions to units in SCPIs dedicated to Pinel investments. Full ownership is required — the reduction does not apply to démembrement situations, and any post-investment démembrement (other than on the death of one member of a jointly taxed couple) triggers recapture.
Geographic zones: where Pinel applies
Pinel is restricted to zones A bis, A, and B1. Zones B2 and C require prior prefectural authorisation and are in practice closed since 2018.
Rent ceilings are monthly per m² excluding charges, then multiplied by a coefficient: 0.7 + 19/S (where S is the surface area), rounded to two decimal places and capped at 1.2. Surface area = habitable surface plus half the surface of annexes (cellars, balconies, storage) up to 8 m² per dwelling, excluding garages. The prefect of the region may reduce these ceilings to adapt to local market conditions. Specific ceilings apply in Brittany and in the overseas territories (CGI Ann. III Art. 2 terdecies D).
Rates and commitment periods
The investor chooses an initial commitment period of six or nine years. At the end of the initial period, the commitment may be extended once or twice by three years each, up to a maximum of twelve years. The reduction is spread equally over the years of the initial period; extensions are imputed by triennale periods. Any fraction of the annual reduction that exceeds the tax due for that year is definitively lost — unused Pinel fractions cannot be carried forward.
| Commitment | Until 31/12/2022 | 2023 | 2024 | Pinel+ (all years) |
|---|---|---|---|---|
| Initial 6-year period | 12% | 10.5% | 9% | 12% |
| First 3-year extension | +6% | +4.5% | +3% | +6% |
| Second 3-year extension | +3% | +2.5% | +2% | +3% |
| Maximum (6+3+3) | 21% | 17.5% | 14% | 21% |
| Initial 9-year period | 18% | 15% | 12% | 18% |
| 3-year extension on 9-year | +3% | +2.5% | +2% | +3% |
| Maximum (9+3) | 21% | 17.5% | 14% | 21% |
The scheduled reduction in rates for 2023 and 2024 does not apply to investments qualifying as Pinel+. These are dwellings that either: (a) are located in a quartier prioritaire de la politique de la ville (QPV); or (b) meet a level of quality — in particular energy and environmental performance — that exceeds the applicable regulations, as defined by Decree 2022-1691 of 28 December 2022 (including for Mayotte). Pinel+ investments retain the pre-2023 rates: 12%/18% for six/nine-year initial commitment, giving a maximum of 21% over twelve years.
The €300,000 annual cap
The reduction is calculated on the acquisition or construction cost of the housing, capped at €300,000 per taxpayer per year and at a maximum of two properties per year. The €300,000 annual cap is global: it covers both direct property acquisition and SCPI subscriptions combined, and takes into account both Pinel and Denormandie investments together.
Letting conditions
The letting must: be unfurnished, as the tenant's principal residence; begin within twelve months of completion, delivery, or acquisition; be at a rent at or below the applicable zone ceiling (after applying the multiplier coefficient); be to a tenant whose resources do not exceed statutory thresholds that vary by zone and household composition; and not be to a member of the investor's tax household. Unlike older schemes, letting to an ascendant or descendant of the investor is permitted under Pinel.
Tenant resource ceilings (2023)
| Household composition | Zone A bis | Zone A | Zone B1 | Zones B2/C |
|---|---|---|---|---|
| Single person | €41,855 | €41,855 | €34,115 | €30,704 |
| Couple | €62,555 | €62,555 | €45,558 | €41,001 |
| Single/couple + 1 dependent | €82,002 | €75,194 | €54,785 | €49,307 |
| Single/couple + 2 dependents | €97,904 | €90,070 | €66,139 | €59,526 |
| Single/couple + 3 dependents | €116,487 | €106,627 | €77,805 | €70,025 |
| Single/couple + 4 dependents | €131,078 | €119,987 | €87,685 | €78,917 |
| Per additional dependent from 5th | +€14,603 | +€13,369 | +€9,782 | +€8,801 |
Recapture and SCPI access
The reduction is clawed back if: the investor breaches the letting commitment; the property is disposed of before the end of the commitment period; or ownership is démembré (other than by reason of the death of one member of a jointly taxed couple, where the surviving spouse assumes the outstanding commitments). Where the reduction is spread over six or nine years, only the instalments attributable to the year of breach and subsequent years are recaptured — not the entire reduction already imputed.
SCPI access conditions: 95% of the subscription proceeds must be used exclusively to finance a Pinel-eligible investment; the annual subscription proceeds must be fully invested within 18 months of the close of subscriptions; the SCPI must commit to letting the housing unfurnished as principal residence (no letting to a subscriber or member of their tax household, but letting to ascendants/descendants is permitted); the units must be held in full ownership; and the subscriber must commit to holding the units throughout the SCPI's letting commitment. Unused annual reduction fractions are definitively lost — no carry-forward.
Denormandie: Old Housing Regeneration
The Denormandie scheme allows investments in old housing requiring substantial renovation works — or in non-residential premises converted into housing — to benefit from the Pinel regime under the same conditions. It was available for investments made between 1 January 2019 and 31 December 2023.
What distinguishes Denormandie from Pinel
Four features distinguish the Denormandie regime from standard Pinel:
- Property type: the housing must be old — not new or off-plan. It may also be a non-residential premises (offices, commercial spaces) converted into housing.
- Works threshold: renovation works — invoiced by a company, not self-performed — must represent at least 25% of the total cost of the investment (acquisition price plus works). Eligible works include improvement of energy performance, modernisation, sanitation, creation of new habitable surfaces from common parts or attics, or changes of usage. Works that constitute deductible revenus fonciers maintenance charges under CGI Art. 31 do not qualify.
- Geographic scope: the housing must be located in eligible town-centre regeneration communes — specifically, communes party to the programme national Action Cœur de Ville, or those with a convention d'opération de revitalisation de territoire (ORT), or certain other eligible communes. Unlike Pinel, Denormandie-eligible housing may be in any zone classification within eligible communes.
- Rates in 2023 not reduced: while standard Pinel rates fell in 2023, Denormandie investments made in 2023 retained the pre-reduction rates — 12% for six-year initial commitment, 18% for nine years, maximum 21% over twelve years.
Subject to those four distinctions, all other conditions of the Pinel regime apply to Denormandie: the €300,000 annual cap (shared with Pinel investments); the letting conditions (rent ceilings, resource thresholds, principal residence requirement, letting within 12 months); the rules on démembrement, recapture, and SCPI access; and the interaction with the global ceiling on personal tax incentives.
Loc'Avantages: Convention-Based Rent Reduction Incentive
Loc'Avantages (CGI Art. 199 tricies) is structurally different from Pinel and Denormandie. It is not a construction or renovation incentive and does not depend on the type or age of housing. It is a tax reduction granted to private landlords who voluntarily enter into a convention with the Agence nationale de l'habitat (Anah), committing to let their property at a rent below market level to tenants satisfying resource conditions, often through an approved social intermediary. It applies to unfurnished bare lettings in metropolitan France and in the DOM, and remains open (no closure date).
Three tiers of convention
The reduction is applied to the net rental income declared by the landlord — the gross rent reduced by deductible charges under the real expenses regime (which must be used for Loc'Avantages). It is therefore a reduction in the income tax due on the net income from the property, not a deduction from rent received. The convention is concluded for a minimum period of six years.
Letting conditions and intermediary requirement
The letting must be unfurnished, as the tenant's principal residence. Rent ceilings and tenant resource ceilings are set by Anah and vary by territory and tier. The landlord cannot let to a member of their own tax household or certain related parties (conditions vary by tier). For Loc 2 and Loc 3, the letting must be made through an approved intermediary organisation (an association, a centre communal d'action sociale, or a body approved by the prefect) — the landlord entrusts management to the intermediary, which sub-lets to the end tenant. Loc 1 direct lettings are permitted without an intermediary, though using one increases the reduction to the applicable tier. In the overseas territories, energy performance improvement conditions apply (see the dedicated overseas investment article).
Like Pinel, Loc'Avantages fractions that exceed the income tax due for a given year are definitively lost — they cannot be carried forward to subsequent years. The Loc'Avantages reduction is subject to the global ceiling on personal tax incentives (plafonnement global des niches fiscales), currently set at €10,000 per year for metropolitan France (€18,000 for certain overseas and specific investments).
The Global Cap and Recapture Rules
All three schemes — Pinel, Denormandie, and Loc'Avantages — are subject to the global ceiling on personal tax incentives (CGI Art. 200-0 A): the total tax reduction obtained from all capped personal tax incentive schemes in a given year cannot exceed €10,000 for standard investments (€18,000 for Pinel in the overseas territories and certain other specific schemes). Unused annual fractions are lost — not banked for future years. Investors who have already used other schemes need to assess whether the Pinel or Loc'Avantages reduction can still be imputed in full.
For Pinel and Denormandie, the full recapture of all reductions already obtained applies where the investor disposes of the property or breaks the commitment in the first year of the commitment period. Where breach occurs in a later year, the reductions already correctly imputed for previous years are not recaptured; only the reduction for the year of breach and remaining years is forfeited or recaptured. The death-of-spouse exception applies consistently: a surviving spouse who assumes the outstanding commitment may continue to benefit.
Any démembrement of ownership of the property or of the SCPI units — whether by gift, sale, or otherwise — during the commitment period triggers recapture of the Pinel or Denormandie reductions obtained. The sole exception is démembrement resulting from the death of one member of a couple taxed jointly, where the surviving spouse or civil partner commits to continuing the engagement for the remainder of its term. Investors considering transmitting property to the next generation during the commitment period should verify this point carefully before proceeding.
Whether you are assessing an existing Pinel commitment, evaluating a Denormandie acquisition, or considering Loc'Avantages for an existing rental property, our guides cover the complete French framework.
Book a ConsultationThis article covers the Pinel (CGI Art. 199 novovicies), Denormandie, and Loc'Avantages (CGI Art. 199 tricies) regimes. Rent ceilings and resource thresholds are those published for 2023; annual updates are issued by decree and should be verified for current applications. Pinel closed to new investments on 31 December 2024; Denormandie on 31 December 2023. Loc'Avantages remains open. This article is for informational purposes only and does not constitute legal or tax advice.
Get Advice
Contracting with a French Party?
We advise sellers and buyers on French sales law, warranties, retention of title and cross-border terms. Speak to our team.
Get Legal Advice
Key Legal References
Pinel: personal income tax reduction for new/VEFA/converted/rehabilitated residential housing let unfurnished as principal residence in zones A bis, A, B1 (zones B2/C in practice closed from 2018). Full ownership required at investment; post-investment démembrement triggers recapture (exception: death of one spouse, surviving spouse assumes commitment). Investment commitment: 6 or 9 years initial; extended by 3-year tranches up to 12 years maximum. Rate (pre-2023): 12%/18% for 6/9-yr initial, max 21% at 12 years. Rate (2023): 10.5%/15%, max 17.5%. Rate (2024): 9%/12%, max 14%. Pinel+: QPV location or quality/energy performance standard exceeding applicable regulations (Decree 2022-1691 of 28-12-2022 incl. Mayotte) → 2022 rates maintained for 2023 and 2024. Reduction spread equally over initial period (6 or 9 annual instalments); extension by triennale. No carry-forward of unused annual fractions. Cap: €300,000/yr per taxpayer; max 2 properties/yr; shared with Denormandie. Letting within 12 months of completion. Rent at/below zone ceiling × multiplier (0.7 + 19/S ≤1.2; surface = habitable + ½ annexes ≤8 m²). Tenant resources below statutory thresholds. No letting to tax household member; ascendants/descendants permitted. Recapture: breach or disposal triggers clawback; if breach not in year 1, only year of breach + remaining years recaptured; reductions already correctly imputed for prior years not recaptured. Scheme closed 31 December 2024
Pinel SCPI conditions: 95% of subscription proceeds to Pinel-eligible investment; full investment within 18 months of close of subscriptions; units held in full ownership; subscriber retains units throughout SCPI letting commitment; no letting to subscriber or tax household member; letting to ascendants/descendants permitted; number of subscriptions unlimited; unused annual fractions definitively lost
Pinel démembrement recapture exception: démembrement resulting from death of one member of jointly taxed couple — surviving spouse or civil partner commits to continuing the engagement for remainder of term; recapture does not apply
Pinel overseas rates (higher): applicable in DOM and certain overseas territories. See dedicated overseas investment article for full schedule
Pinel+ quality and energy performance criteria: dwellings qualifying for Pinel+ must be in QPV or meet standards exceeding applicable thermal/environmental regulations as defined by this decree (including for Mayotte)
Pinel and Denormandie rent ceilings (metropolitan France, 2023): Zone A bis €18.25/m²; Zone A €13.56/m²; Zone B1 €10.93/m²; Zones B2/C €9.50/m². Monthly per m² excluding charges; multiplied by 0.7 + 19/S (capped at 1.2); surface = habitable surface + ½ annexes (cellars, balconies, storage) ≤8 m² per dwelling; garages excluded. Prefect of region may reduce ceilings for local market conditions. Specific ceilings apply in Brittany
Pinel rent ceilings for overseas territories
Denormandie: same conditions as Pinel applied to old housing (or non-residential premises converted to housing) in eligible communes (Action Cœur de Ville; ORT convention; or equivalent). Works threshold: ≥25% of total investment cost (acquisition + works); works invoiced by company (not self-performed); eligible works: energy performance improvement, modernisation, sanitation, creation of new habitable surface from common parts or attics, change of usage; excluded: works deductible as CGI Art. 31 revenus fonciers charges. 2023 rates not reduced (12%/18%, max 21%). €300,000 cap shared with Pinel. All other Pinel conditions apply. Scheme closed 31 December 2023
Loc’Avantages: income tax reduction on net rental income for landlords entering Anah convention. Three tiers: Loc 1 (intermediate rent) 15%; Loc 2 (social rent) 35%; Loc 3 (very-social rent) 65%. Applied to net rental income under real expenses regime (mandatory). Anah convention: minimum 6 years. Letting: unfurnished; principal residence; Anah-set rent ceilings and tenant resource thresholds by zone and tier. Loc 1: direct letting possible. Loc 2/Loc 3: letting through approved intermediary required (association, CCAS, prefect-approved body); intermediary sub-lets to end tenant. No closure date. No carry-forward of unused fractions. Subject to global cap on tax incentives (€10,000 metropolitan standard; €18,000 elevated). Overseas: energy improvement condition applies; specific Mayotte rent ceilings: Loc 1 €10.73/m²; Loc 2 €8.16/m²; Loc 3 €6.36/m²
Loc’Avantages overseas energy improvement condition and Mayotte-specific rent and resource ceilings
Global ceiling on personal tax incentives (plafonnement global des niches fiscales): total capped tax reductions per year cannot exceed €10,000 for standard metropolitan investments; €18,000 for Pinel overseas and certain other specific schemes. Unused fractions in any year definitively lost across all capped schemes. Applies to Pinel, Denormandie, and Loc’Avantages
