Finally, in the final stretch before its planned extinction on December 31, the “Pinel” tax niche, harshly criticized in recent years by several evaluation missions, found favor with the Court of Auditors. In a report entitled “Tax aid for rental investment Pinel”, published on Thursday, September 5, the institution undoubtedly believes that this tool to encourage rental investment “only imperfectly meets the objectives of building and renovating housing in tense areas”but also recognizes its virtues.
As France is going through a serious real estate crisis, financial judges stress that the homes produced thanks to Pinel “they present quite high quality criteria”and that the tenants correspond well to the intended recipient, i.e. rather modest households, who have difficulty finding housing in the private or social sector.
This tool allows people who wish to invest in housing to benefit from a reduction in income tax with, as a social counterpart, a rent at limited rental levels and tenant resources, for a minimum period of six years, and in areas where it is particularly difficult to find housing.
However, in an extremely tense budgetary context, the executive considered, in 2023, that the tax loophole was ineffective and too costly (7.3 billion euros in total) for public finances. By scrapping the “Pinel”, Elisabeth Borne’s government is also closing 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.
Attracting private owners en masse
The aim was to attract private landlords en masse to the rental property market, while insurance companies, banks and mutual insurance companies withdrew from it, for reasons of profitability and because the Quilliot law of 1982 strengthened the protection of tenants and made their eviction more difficult. The proportion of institutional investors in the private rental market then plummeted, from 18% in 1984 to 3% in 2019.
After the “Quilès”, tax-advantaged schemes have been added to or followed one another, each bearing the name of the person who then holds the housing portfolio (Méhaignerie, Périssol, Besson, Robien, Borloo populaire, Scellier, Duflot and Pinel). There is success: housing acquired through tax-advantaged schemes between 2014 and 2017 represents 48% of new housing stocks, according to an assessment carried out in 2019 by the General Inspectorate of Finance (IGF).
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