The paradox did not go unnoticed by the Court of Auditors. In its report entitled “Tax aid for Pinel’s rental investment”, published on Thursday, September 5, the institution notes that the government presented in 2023 “a plan to respond to the real estate crisis”One of the main measures was “the extinction of the Pinel system on December 31, 2024”However, this tax advantage to encourage rental investment was precisely designed to revive housing construction, particularly so-called “intermediate” private rental housing (for rather modest households), in stressed areas.
While many French people are having great difficulty finding affordable housing, was it the right time? By scrapping the “Pinel” with a stroke of the pen, Elisabeth Borne’s government closed a forty-year parenthesis of tax exemption policy, initiated in 1984 with the “Quilès”, a device named after the Minister of Housing at the time, without “precise measures with respect to the alternatives considered”the financial judges stressed.
However, in an extremely tense budgetary context, the government considered the “Pinel” tax break to be ineffective and too costly for public finances. Over the period 2014-2021, the cumulative amount of the tax break amounted to more than €4 billion.
Contrasted assessment
The Court of Auditors makes a contrasting assessment. “The Pinel system only imperfectly fulfils the objectives of building and renovating housing in tense areas”He complains. Since the administration was unable to provide the number of homes built thanks to Pinel, its evaluation was hampered. “In the absence of precise constructive objectives”the device “It was clearly not designed to measure the increase in the supply of intermediate rental housing, although this is the reason for this tax exemption”The report notes. However, the Court’s investigation shows that “that the Pinel residences are located mainly in tense and low-tense areas”.
Another obstacle, Pinel only responds “temporarily for housing needs” target households. In fact, the tax reduction is granted under certain conditions: landlords must agree to limit rents and tenant income, for a rental commitment period of six, nine or twelve years.
Landlords are therefore “logically” more inclined to sell or take back their property at the end of this commitment period, rather than holding it as a rental under a double roof. And all the more so since the resale of the property is “very often” the main means of making Pinel financially attractive to investors.
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