Housing: the Pinel tax niche has imperfectly fulfilled its objectives according to the Court of Auditors

The Pinel scheme, which came into force in 2014 and is named after the former Minister of Housing, Sylvia Pinel (PRG), allows individuals who invest in new or renovated housing to benefit from a reduction in income tax by renting it out.

Among the conditions to be met: rental in collective housing at capped rent levels and tenant resources, for a minimum period of 6 years, and in areas where it is particularly difficult to find housing.

For nearly 40 years, for real estate, "more than ten tax systems" have succeeded one another, "even overlapped", leading to a "form of dependence of developers-builders", observe the authors of the report.

The government now considers the Pinel system to be costly and ineffective, and plans to abolish it.

It "only imperfectly fulfils" its construction objective, confirms the Court of Auditors.

Although it has certainly "contributed significantly to the triggering of real estate transactions which could not have been completed, or could have been completed less quickly", it is impossible to evaluate its impact precisely due to a lack of data on the number of dwellings concerned, notes the Court.

Pinel also mainly attracts wealthy investors looking for a tax-reduction tool. This represents an overall cost to public finances of around 7,3 billion euros over ten years.

In "tense zones"

Pinel residences are, moreover, mainly located in “tense areas” and not in “very tense areas”.

The rented accommodation measures on average 57 m2, mainly benefits young workers without children and has rents below the required ceilings, with the exception of 13% of them.

Among other disadvantages, landlords prefer to recover or resell their property the day they no longer benefit from the system. The authors of the report conclude that Pinel housing "is not intended to form a sustainable stock of intermediate housing (with regulated rents but higher than in social housing, Editor's note)".

While they tend to push up prices in less popular areas that have become attractive again, these homes, on the other hand, play a moderating role in areas under high tension.

The alternative to the system envisaged by the public authorities "consists of mobilizing institutional investors (banks, insurers, editor's note) instead of individuals", underline the authors of the report.

Formulating several recommendations, they call for any new possible system to be accompanied by "evaluable objectives" and to be equipped with "monitoring tools and control procedures".

The Federation of Real Estate Developers (FPI) for its part called on Thursday for the Pinel system to be maintained, or even strengthened, while new real estate is going through a deep crisis.

"One of the elements highlighted in (the) report (from the Court of Auditors, Editor's note) is that Pinel contributes to social financing, that it can be a trigger for urban restructuring operations and that it responds to a real demand", argued Didier Bellier-Ganière, general delegate of the FPI, during the quarterly press briefing of this federation.