The Pinel scheme, created in 2014, came to an end on 31 December 2024. Millions of property investors now find themselves without their favourite tax-break tool. But is this really bad news? And what alternatives exist in 2026?
If you subscribed to a Pinel scheme before 31/12/2024, your tax advantage is maintained until the end of your commitment (6, 9 or 12 years). Only the purchase of new properties under Pinel is no longer possible from 1 January 2025.
The Pinel Scheme in Review: A Mixed Success
The Pinel law facilitated the construction of over 500,000 new homes between 2014 and 2024. For investors, the tax advantage was:
- 12% income tax reduction for a 6-year commitment
- 18% for 9 years
- 21% for 12 years (capped at €300,000 of investment)
But in practice, many investors ended up with overpriced properties (developers inflated new-build prices knowing the tax break absorbed the gap), rent-capped below market rates in some areas, and difficulty selling at a profit.
The Alternatives in 2026
1. The Denormandie Scheme — Old Properties with Renovation
Denormandie is often described as the "Pinel for old properties". It offers the same tax advantages (12% / 18% / 21%) but applies to older properties requiring renovation in eligible towns under the "Action Cœur de Ville" programme.
Conditions:
- Property located in one of the 222 eligible municipalities
- Renovation works representing at least 25% of total project cost
- Rent and tenant income capped
- Rental commitment of 6, 9 or 12 years
Advantage over Pinel: old properties are less overvalued than new builds, improving the actual rental yield. Furthermore, renovation can generate a property deficit deductible from overall income.
2. LMNP Status — The Discreet Star of Property Investment
The Non-Professional Furnished Lettings (LMNP) status is, in our view, the best tax scheme for property investors in 2026. Here is why:
- Accounting depreciation: you can depreciate the property (excluding land) and furnishings, generating deductible costs without cash outflow. Result: your rental income is often tax-free for 10 to 20 years.
- No rent cap or tenant income ceiling (unlike Pinel/Denormandie)
- Applicable anywhere in France (serviced residences, furnished studio, furnished houseshare…)
| Regime | Annual Revenue | Taxation | Advantage |
|---|---|---|---|
| LMNP micro-BIC | < €77,700 | 50% flat allowance | Simplicity |
| LMNP réel simplifié | All levels | After deducting costs + depreciation | Optimal taxation |
3. The Malraux Scheme
For heavily taxed taxpayers (marginal rate 41% or 45%), Malraux offers a tax reduction of 22 to 30% of restoration works in Protected Areas or ZPPAUP zones. It sits outside the general tax niche ceiling. However: investment is necessarily expensive and risky if poorly selected.
4. Historic Monuments
100% deduction of property costs from overall income for owners of listed Historic Monuments. Reserved for high-net-worth taxpayers and heritage enthusiasts. No tax niche ceiling applies.
5. Property Deficit — Simple and Effective
By purchasing an older property with significant renovation works, you create a property deficit deductible from your overall income up to €10,700/year (extended to €21,400/year for energy renovation works until 2025). The surplus can be carried forward 10 years against future property income.
Comparison Table: French Property Tax Schemes 2026
| Scheme | Property Type | Tax Advantage | Niche Ceiling | Constraints |
|---|---|---|---|---|
| Denormandie | Old, renovated | Income tax reduction 12–21% | Yes (€10,000) | Limited zones, capped rents |
| LMNP (réel) | Furnished, anywhere | Income often tax-free | No (depreciation) | Compulsory bookkeeping |
| Malraux | Restored buildings | 22–30% reduction on works | No | Listed zones, high cost |
| Historic Monuments | Listed monuments | 100% cost deduction | No | Very rare, expensive |
| Property Deficit | Old with renovation | Deduction up to €10,700/yr | No | Unfurnished letting for 3 years |