An investor signing a compromise in 2024 is not playing by the same rules as two years ago. The phasing out of the Pinel scheme, the rise and then gradual stabilization of borrowing rates, and the introduction of new schemes like Intermediate Rental Housing are reshaping the choices. To succeed in real estate today, one can no longer simply replicate the formulas from 2018-2022.
Intermediate Rental Housing: the scheme that classic guides ignore
Most articles on real estate investment in 2024 continue to detail the Pinel or Denormandie schemes. The problem: the Pinel is legally extinguished for any acquisition after December 31, 2024. No equivalent national tax exemption scheme has been voted to replace it in the standard new segment.
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The Intermediate Rental Housing (LLI) has taken over rapidly since 2023. Supported by operators like CDC Habitat and in’li, this scheme targets rents situated between social housing and the free market. The tax advantages differ from Pinel: we are talking about reduced VAT at acquisition and an exemption from property tax, subject to location conditions and rent ceilings.
In practice, the LLI is less aimed at individual investors than at those investing through an operator or a bare ownership arrangement. If one is looking to position themselves in new properties with a tax advantage in 2024, this is the scheme to consider, not a Pinel that no longer exists. Updated analyses on these regulatory changes can also be found on Inside Out’s real estate resources.
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Real estate credit and borrowing capacity: what has changed for investors
Borrowing rates experienced a sharp rise between 2022 and 2023, before stabilizing. This sequence has mechanically reduced the borrowing capacity of many profiles, and the profitability calculation of a rental investment has become stricter.
On the ground, two direct consequences are observed. The first: banks strictly apply the maximum debt ratio, complicating second purchase applications. The second: sellers of old properties adjust their prices more slowly than the market would require, creating a gap between supply and demand.
For an investor, the margin for negotiation on the purchase price has become a lever for profitability as powerful as the choice of tax regime. Negotiating the sale price helps to partially offset the additional cost of credit. This is a reflex that many guides overlook, as it involves accepting to make low offers and facing refusals.
SCI or LMNP: two vehicles, two asset strategies
The choice between SCI taxed under corporate tax (IS) and the LMNP (Non-Professional Furnished Rental) status is not just a question of taxation. The SCI taxed under IS allows for depreciation of the property but blocks the capital gains upon resale, taxed on the difference between the sale price and the net accounting value. The LMNP, on the other hand, offers accounting depreciation of the property and furniture, with a capital gains regime for individuals upon resale.
In practice, the SCI taxed under IS is better suited for a portfolio that one intends to keep for a long time without the intention of resale. The LMNP remains more flexible for an investor considering a medium-term resale. Feedback on this point varies depending on family situations and the amounts invested.
Real estate taxation 2024: concrete choices after the end of Pinel
Without Pinel, real estate tax exemption schemes are refocusing on a few options:
- The property deficit, which allows for the deduction of renovation costs from rental income, and then from global income within a certain limit. Particularly relevant for the purchase of thermal sieves to renovate.
- The Denormandie scheme, applicable in certain eligible municipalities for works representing a significant part of the total cost of the operation. Its geographical scope remains limited.
- Temporary bare ownership, which involves buying a depreciated property (with the usufruct ceded to a social or intermediate landlord) and recovering full ownership at the end of the dismemberment, without taxation on rents not received.
- The LMNP under the real regime, which remains the most used vehicle by individual investors to generate low-taxed rental income thanks to depreciation.
Each of these arrangements requires a precise analysis of the project. A property deficit is only of interest if the works are real and well-costed. A bare ownership is only profitable if one does not need immediate income.
Books and training on real estate investment: sorting the useful from the noise
The market for books on rental investment has exploded in recent years. Among the works regularly cited by active investors, there are guides that detail each step of the process, from property selection to rental management, including tax optimization.
A good real estate investment book is recognized by a simple criterion: it exposes the risks and real profitability calculations, not just favorable scenarios. Books that promise quick financial independence without addressing vacancy, unpaid rents, or the actual cost of works lack credibility.
On the training side, caution is advised. Many online programs charge several thousand euros for content that can be found for free in reference books or on specialized wealth management sites. Before paying, one should check the trainer’s actual background and seek concrete feedback from former participants.
Free resources worth checking out
The practical sheets from the Ministry of Economy on tax schemes (Pinel, Denormandie, LMNP) remain the most reliable source to verify eligibility conditions. Online brokers’ credit simulators allow for a quick assessment of borrowing capacity. And investor forums, despite their raw appearance, offer on-the-ground feedback that is hard to find in a book.
Real estate in 2024 rewards those who master tax arrangements and negotiate the purchase price, not those looking for a miracle scheme. The Pinel has disappeared, the LLI is gaining momentum, and the LMNP remains the foundation of most rental projects. Adapting one’s strategy to these new coordinates makes all the difference between a profitable investment and a financial burden.