The end of Pinel: how to invest in 2025?

The Pinel scheme, which enabled many investors to benefit from tax advantages by investing in new property, came to an end on December 31, 2024. From 2025, investors will have to turn to other strategies. Investing in new-build property is still very attractive, and there are two alternatives for optimizing your investment.

Non-professional furnished rental status (LMNP)

LMNP status is an ideal alternative for investors wishing to generate rental income while optimizing their tax situation.

How does it work?

Non-professional furnished rental is a tax-advantaged way of renting out real estate. It allows you to generate low-tax rental income. You can rent the property to a private individual as a principal residence or for seasonal rental. The property must be rented furnished.

With LMNP, you can choose between two tax systems: the Micro-BIC system or the Real system.

• The Micro-BIC scheme applies if your annual rental income is less than €77,000. Under this system, you benefit from a 50% tax allowance, which means that you declare only 50% of your rental income. Under this system, you cannot create a deficit or deduct expenses, as the allowance compensates for expenses incurred.
• On the other hand, under the "régime réel" system, you can deduct all rental-related expenses (condominium fees, agency fees, loan interest, insurance, upkeep of the property, etc.) and amortize the value of the property and furnishings, thereby reducing the amount of taxable income and, consequently, your tax bill.

⚠ Caution: With the 2025 Finance Bill, in the event of resale of the property, depreciation is reintegrated into the calculation of the capital gain.

The advantages of the status :

• Generates low-tax income
• Deduction of certain expenses
• Flexible status
• Choosing your tax system
• More attractive rental income because the property is rented out furnished

Conditions to be met: 

• Annual rental income must be less than €23,000; if it exceeds this amount, you must convert to LMP status.
• The lessor must be registered with the Trade and Companies Registry (RCS) and obtain a SIRET number (registration must be made within 15 days of the start of the rental period).
• Renters must declare their rental income on their annual tax return, and complete the supplementary tax return n° 2042-C-PRO for the BIC regime. For the actual regime, the lessor must report his income on the professional declaration n° 2031-SD.
• The accommodation must be furnished and include a certain number of furnishings set by decree no. 2015-981 of July 31, 2015.

CIOP: Overseas Productive Tax Credit

The Overseas Productive Tax Credit (CIOP) is a tax scheme governed by article 244 Quater W of the French General Tax Code. It runs until December 31, 2029. This scheme provides a 35% tax credit on the purchase of a new rental property in the French overseas departments and regions.

How does it work?

The scheme is open only to legal entities (SARL, SCI, EI, etc.). The company must acquire a property before completion.

The CIOP amount is calculated on the price of the investment, capped at €3,295 excluding tax per m² of living space (including living space and up to a maximum of 14 m² of varangue), in accordance with article 199 undecies A.

The tax credit is paid out in three stages:

• 70% on completion of foundations
• 20% at waterproofing
• 10% on delivery

The CIOP payment request is made when completing the tax return, by choosing the CIOP option. The tax credit is collected between 7 and 9 months after the closing of the accounts.

The benefits of CIOP:

• high profitability ratio
• lower acquisition costs

Conditions to be met: 

• The company must be domiciled in the French overseas department in which the acquisition is made, be subject to corporate income tax and be up to date with its tax and social security obligations.
• The property must be let continuously for 5 years and must be kept by the owner for 7 years.
• The property must be rented as a principal residence, with a rent ceiling of €16.66/m² per month excluding charges (i.e. €200/m² per year).
• The property must be rented out within 12 months of the DAT (Declaration of Completion of Work).

Diamond: our excellent investment product

Résidence Diamant represents a unique investment opportunity. The end of the PINEL scheme doesn't mean the end of opportunities, as tax incentives such as LMNP and CIOP offer greater profitability.

Invest in LMNP: Rent for tourism and optimize your rental income!

With LMNP status, you can generate low-tax income while enjoying an attractive return (up to 8%). Amortization, deduction of all expenses... the advantages are numerous!

* according to estimated rates on tourist rental websites
** an average 25% management fee for tourist properties, compared with 11% for traditional rental management with GLI (Garantie Loyer Impayé).

Invest in CIOP: Receive up to €93,920 in tax credits! Reduce the purchase price of your investment and benefit from a return of up to 5%.

* according to local agency estimates

In comparison, PINEL

* calculation with respect to the index based on surface area and according to monthly rent ceilings 2025 defined by the State, i.e. 12.02€ per m2 in Guadeloupe

The simulations provided are for information purposes only and do not constitute a commitment on our part. We recommend that you consult a chartered accountant or a qualified firm for a personalized analysis of your situation.