How to Declare Your Pinel Investment in France?

Investing in real estate is a well-known way to build additional income simply and effectively.

Since the introduction of the Pinel scheme, more and more investors have chosen to invest in new-build properties to secure a solid investment.

By following specific steps during the tax declaration of a Pinel investment, it is possible to benefit from a significant tax reduction.

In this article, we break down the Pinel tax reduction scheme and the essential steps to easily declare your Pinel investment.

Comment déclarer son investissement PInel ?

The Guidelines of the Pinel Scheme

The Pinel scheme applies to new-build real estate investments acquired from September 1, 2014 onwards. It replaces previous schemes such as Duflot and Scellier, focusing on tax benefits in the form of income tax reduction. This reduction can reach up to €63,000 or 21% of the investment.

The tax reduction granted through the Pinel scheme depends on the total rental commitment period:

  • 12% of the purchase price for a 6-year rental commitment
  • 18% of the purchase price for a 9-year rental commitment
  • 21% of the purchase price for a 12-year rental commitment

The scheme encourages individuals to invest in long-term, sustainable real estate projects.

To benefit from this tax reduction, investors must declare their Pinel investment when filing their Income Tax Return (IR).

Important: This declaration must be made in the year following the Completion of Construction Declaration (DAT) of the property. The declaration must then be renewed annually until the end of the rental commitment period.

Steps to Declare Your Pinel Investment

To qualify for the Pinel tax reduction, you must follow several key steps when declaring your investment.

 


 

1. Define the Property Characteristics and Rental Commitment Period

 

The first step is to define and declare the property characteristics and rental commitment duration.

To do this, you must fill out Form 2044 EB, ensuring that all relevant details are provided, including:

  • Identity and addresses of both the landlord and the property
  • Date of acquisition or completion of construction
  • Property size
  • Rental price
  • Initial rental commitment period (6 or 9 years)
  •  

Important: This form must be submitted in the first year of declaration, alongside the real estate income tax return.

 

The tax authorities may also request additional documents, including:
A copy of the tenant’s tax notice (from year N-2)
A copy of the rental lease agreement
A copy of the Completion of Construction Declaration (DAT) (for off-plan purchases – VEFA)
A property ownership certificate

 


2. Declare Your Rental Income

 

The next step is to declare your rental income.

To do this, you must complete Form 2044S, detailing:

  • Rental income received
  • Property expenses paid (such as loan interest, property tax, condominium fees, management fees, insurance, renovation work, etc.)

Unlike Form 2044 EB, which is submitted only once, the rental income declaration must be renewed annually.

 

This declaration can result in either a positive or negative financial result, which must be reported in Form 2044 Special, automatically generated by Qlower for its users.

 

 

 


3. Report the Rental Income to the Personal Income Tax Return

 

After completing the rental income declaration, specific amounts must be transferred to the income tax return (Form 2042).

 

 

Depending on the financial result, this may involve:
A taxable rental income amount
A deductible loss (deficit) applied to global income
A carryforward deficit (for future rental income over the next 10 years)

 

 

Key point: If the rental income declaration results in a negative balance, up to €10,700 per year can be deducted from overall taxable income.

Any remaining deductible amount can be carried forward for future rental income deductions.

 

 


4. Declare the Pinel Tax Reduction

 

The final step is to declare the tax reduction associated with your Pinel investment.

This is done using Form 2042 C, under the section:

“Tax reductions & credits” → “Pinel investment”

 

You must enter the total acquisition cost of your property. The tax reduction is then calculated as follows:

2% per year of the total acquisition cost for the first 6 or 9 years
1% per year if you extend the Pinel scheme for an additional 3 years

 


Final Thoughts: Declaring a Pinel Investment Is Simple If You Follow the Right Steps

 

Declaring a Pinel investment is a fairly simple process, provided that you carefully follow each step.

In case of tax audits, landlords must provide:

-A copy of the Completion of Construction Declaration (DAT)
– A copy of the rental lease agreement

 

 

Qlower users benefit from step-by-step guidance to verify these tax forms and receive clear advice to optimize their real estate portfolio management.

Facebook
Twitter
LinkedIn

Join the Qlower Community

Join the Qlower Community

Qlower offers useful content (articles, tips, and more) to help you build and grow your real estate portfolio. Join the Qlower community and share your questions and feedback.

 

Guide LMNP

Téléchargez gratuitement le guide ultime de la location meublée (LMNP et LMP)

Obtenez dès maintenant tous les conseils d’experts pour vous faciliter la vie et boostez votre activité de loueur en meublé