The new programs of Thonon and Evian eligible for Pinel in Zone A
Located in Haute-Savoie, Thonon-les-Bains and Evian-Les-Bains benefit from a strategic geographical location. On the shores of Lake Geneva and close to the Swiss border, these towns are particularly attractive for cross-border workers. Their pleasant living environments and their proximity to Geneva accessible by the Léman express train and to Lausanne by the CGN boat appeal to young working people, often tenants. Consequently, Thonon-les-Bains and Evian-Les-Bains present a tight real estate market. Municipalities eligible for the Pinel law system, the situation is ideal for making a rental investment and benefiting from tax exemption. Find our article on the evolution of the PINEL 2023 system HERE.
DECORDIER immobilier informs you in this article on the latest news about the PINEL system, in particular its change of ZONE, and invites you to discover its new eligible Pinel real estate programs in Thonon-les-Bains and Evian-Les-Bains HERE.
The passage of Thonon-Les-Bains and Évian-Les-Bains into zone A of the Pinel system: what impact on real estate and investment?
The Pinel system, established in 2003 with the promulgation of the Robien law, was designed to encourage investment in rental real estate by offering attractive tax incentives to investors. It was based on geographical areas, classified as A, B and C, thus establishing levels of tension in the French real estate market still in force to this day. This zoning has obviously had to be revised and adapted over the years, as in 2006, 2009, 2014.
To date, it is still possible to invest in zones A, A bis and B1.
The Pinel zones were modified on October 2, 2023, by decree. Several towns have been reclassified from zone B1 to zone A. This is notably the case of Thonon-les-Bains and Évian-les-Bains, two towns located in the Haute-Savoie department, which are now reclassified as zone A of the Pinel device. This modification sparked strong reactions among real estate investors and local market players. Indeed, the Pinel rental investment program is conditional on compliance with rent ceilings set by decree and the tenant's resources must be lower than a ceiling set by the general tax code; this in order to reserve the housing concerned for low-income households.
What does moving to zone A mean for Thonon and Évian?
The reclassification of Thonon and Évian in zone A of the Pinel system has direct implications on the eligibility conditions and tax advantages for investors. This reclassification indicates the strong attractiveness of these cities on the real estate market. Indeed, moving to zone A means that it is an area where real estate demand is extremely strong; rental demand is very high, the market is dynamic and rental prices are generally also very high and it is therefore difficult to find housing for many people.
Resource ceiling for the year 2023 Zone A
- Single person: €41,855
- Couple: €62,555
- Single person or couple with 1 dependent: €75,194
- Single person or couple with 2 dependents: €90,070
- Single person or couple with 3 dependents: €106,627
- Single person or couple with 4 dependents: €119,897
- Increase per dependent from the 5th: €13,369
Impact on local real estate
Thonon-Les-Bains and Évian-Les-Bains are popular destinations for investors, in particular because of their privileged geographical location on the shores of Lake Geneva and the proximity to Switzerland which attracts many cross-border commuters; find our article on the reasons for the attractiveness of Evian and Thonon for cross-border workers HERE. This change of status to zone A further reinforces this attractiveness. It is very likely that this will lead to an increase in property prices in this Lake Geneva region, reflecting the growing demand for housing. Which also explains why Chablais area is not subject to the downward real estate cycle.
However, this price increase could also impact the profitability of Pinel investments. With higher purchase prices, rental yields could be lower, which may influence investors' decision.
The tax advantages of the Pinel system
Although reclassification in zone A can make the initial investment more expensive, the tax advantages offered by the Pinel system remain attractive for investors. By investing in new real estate in Thonon-Les-Bains or Évian-Les-Bains and renting it over a defined period, investors can benefit from substantial tax reductions, proportional to the rental period (10.5% of the investment amount for a rental commitment of 6 years in 2023/ 9% in 2024, 15% for a rental commitment of 9 years in 2023/ 12% in 2024 or 17.5% for a 12-year commitment in 2023/14% in 2024). This degression does not apply to accommodation meeting the new criteria allowing you to benefit from Pinel +.
The tax reduction is received during the entire rental period, provided that the total amount does not exceed 300,000 euros and 5,500 euros per square meter.
Pinel + takes over from Pinel from 2023 and even after 2024 by offering the same tax advantages as classic Pinel before 2023, provided that the housing meets certain criteria, particularly environmental and usage criteria.
Housing acquired in 2023 must reach the RE2020 thresholds (find our article HERE), which will come into force in 2025; housing acquired in 2024 must also meet this criterion and also reach class A of the Energy Performance Diagnosis (DPE: find our article HERE); for housing acquired in 2023 or 2024, for which the building permit was requested before January 1, 2022, a specific provision is provided. The environmental criteria are based on the “E+C-” label and the DPE label A must be achieved; for housing acquired in 2023 and 2024 not resulting from a construction operation (concept aimed at constructing a new building or extending an existing building), such as a new renovation, must be classified A or B of the DPE.
Concerning the usage criteria, the minimum living space must correspond to:
- 28 sqm for a 1-room apartment
- 45 sqm for a 2-room apartment
- 62 sqm for a 3-room apartment
- 79 sqm for a 4-room apartment
- 96 sqm for a 5-room apartment.
The accommodation must also include private or private outdoor spaces with a minimum surface area of:
- 3 sqm for a 1-room or 2-room
- 5 sqm for a 3-room
- 7 sqm for a 4-room
- 9 sqm for a 5-room
Calculation method for housing in Pinel + Zone A 2023
For leases concluded or renewed in 2023, the monthly rent ceiling per square meter, charges not included, is set at €13.56/sqm.
Here is the calculation method to know the maximum rent amount in relation to the sqm of an apartment: Useful surface area x multiplier coefficient x rent ceiling zone A
The maximum rent ceiling must be multiplied by a coefficient of 0.7+19 then divided by the weighted surface area.
Example: For a 42 sqm apartment with a 6 sqm balcony in Evian or Thonon, in Zone A:
Surface area to take into account: 42 sqm + (6/2 sqm) = 45 sqm
Ceiling zone A: 13.56€/sqm
Maximum rent: (13.56 x (0.7+19/45)) x45 = €684.78
The surface area to be taken into account is the habitable surface plus half of the annexes. Such as cellars, basements, attics, balconies, upper floor terraces or verandas. These must not exceed 9 sqm and ground floor terraces and gardens are not counted.
Strategies for investors
Faced with this change in area, investors could consider different strategies to maximize their investments. For example, some could turn to real estate to renovate or real estate development operations to increase their profit margin.
Another strategy would be to turn to neighboring towns which remain in zone B1 or B2 of the Pinel system, potentially offering investment opportunities with more affordable purchase prices and attractive rental yields.
Conclusion
The passage of Thonon-Les-Bains and Évian-Les-Bains into zone A of the Pinel system will undoubtedly have a significant impact on the local real estate market. While this increases the attractiveness of these cities and their investment potential, it could also pose challenges for investors due to rising property prices.
However, the tax advantages of the Pinel system remain attractive, and with a thoughtful investment strategy, investors could still take advantage of these changes to boost their real estate portfolio in the Thonon-Les-Bains and Évian-Les-Bains region.
Do not hesitate to stop by our DECORDIER immobilier Evian and Thonon agencies to discover the new Pinel and Pinel+ eligible programs thanks to their RE2020 standards.
DECORDIER immobilier agencies can help you with your real estate project:
- Thonon +33 (0) 4 50 72 31 95 / e-mail : thonon@decordier-immobilier.com
- Evian +33 (0) 4 50 75 15 15 / e-mail : evian@decordier-immobilier.com
- Grand-Baie : +230 268 2828 / e-mail : contact@decordier-immobilier.mu
www.decordier-immobilier.com