To this end, there are two laws that stand out offering interesting advantages: the Pinel Ancien Law and the Denormandie Law. Which of the two devices to choose?
How does the Denormandie law and the Pinel Ancien law work?
Although we tend to confuse pinel and denormandy laws, they do not work the same way. We present them to you quickly.
The Denormandy law
Created in 2019, the Denormandie law is the initiative of Julien Denormandie. It aims to rehabilitate buildings in many precarious areas and then transform them into habitable housing. This law is set to end at the end of 2022 and concerns 245 cities. To benefit from this device, certain conditions related to the rehabilitation of the goods must be respected.
In addition, it is important to know that the Denormandie law imposes specific amounts for the cost of the work.
The Pinel Old Law
Created in 2014, the Pinel Ancien law is a tax reduction reserved for individuals who buy old housing. This law will end in 2024 and requires certain eligibility conditions to be met before benefiting from it. For this purpose, the dwellings must be old. According to the law, dwellings that have had at least one owner are considered old.
To benefit from the Pinel Ancien system, the property must be of two types, namely:
- an industrial building or commercial premises to be rehabilitated into housing for individuals;
- a dwelling considered unsanitary and uninhabitable.
The property must also be rented out within 30 months after its renovation. Regarding the eligible zones, the Pinel Ancien follows the same zones as the Pinel Neuf. The Pinel Ancien law does not impose an amount concerning the conditions of rehabilitation.
What are the advantages of the Denormandie law and the Pinel Ancien law?
Even if the two devices do not work in the same way, in terms of advantages, they offer the same reductions to investors, namely:
- 12% of tax reduction by renting the accommodation for 6 years;
- 18% for a 9-year lease;
- 21% for a period of 12 years.
Denormandie law and the Pinel Ancien law: which one to choose?
Between the Pinel Law and the Denormandie Law, there is no ideal choice. These are two real estate tax exemption schemes that are suited to different investment strategies. It is up to you to choose the solution that suits you best according to the points of similarity and points of divergence set out above.