Which scheme should you choose to invest in new-build?

In brief:

1. The Pinel scheme disappeared on 31 December 2024: investing in new-build now runs through LMNP, bare ownership or the property deficit.
2. LMNP under the real regime depreciates the property over 25 to 30 years and wipes out a large share of rental taxation.
3. Bare ownership offers a 30 to 40% discount at purchase, with no rent or management for 15 to 20 years.
4. The property deficit, capped at 10,700 € per year against overall income, remains poorly suited to new-build for lack of deductible works.

Investing in new-build after the end of Pinel

Choosing the right new-build rental investment scheme has become the first question for every buyer since 2025. The end of Pinel reshuffled the deck: there is no longer an automatic tax reduction attached to buying a new home. Investors must now reason in terms of ownership taxation and investment horizon rather than an immediate tax break.

Three schemes dominate today’s new-build investment strategies: the LMNP status, buying in bare ownership, and the property deficit. Each answers a different profile and objective. None is universally best: it all depends on the need for income, the level of taxation and the intended holding period.

Why Pinel is no longer an option

The Pinel scheme ended on 31 December 2024. Homes acquired from 2025 onwards no longer qualify for the tax reduction, which could reach 14% of the price over twelve years in its final version. This planned closure forces a comparison of the mechanisms that remain, all based on the real taxation of rental income rather than a flat-rate incentive.

LMNP, the flagship scheme for furnished new-build

The status of non-professional furnished landlord (LMNP) is the most used to invest in new-build. It applies to furnished rental, whose income is taxed as industrial and commercial profits (BIC) rather than property income. This difference in category opens a powerful lever: depreciation.

LMNP suits investors who want rents that are lightly or not taxed during ownership. It fits new-build particularly well, whether in standard furnished rental or in serviced residences (student, senior), common in recent Île-de-France developments.

Micro-BIC or the real regime

Two regimes coexist. Micro-BIC applies a flat 50% allowance on rents, simple but not very efficient. The real regime allows the deduction of all charges (loan interest, property tax, management) and, above all, the depreciation of the property and furniture.

• Building depreciation: spread over 25 to 30 years, excluding land value.
• Furniture depreciation: over 5 to 10 years.
• Combined effect: taxable rents are often brought to zero for many years.

In practice, for a new studio worth 200,000 € let furnished, annual building depreciation is around 6,000 to 7,000 €. Added to deductible charges, it often exceeds the 8,000 to 9,000 € of annual rent received, bringing the taxable base to zero for around fifteen years. It is this tax cancellation, rather than a flat-rate reduction, that makes the scheme powerful.

Since 2025, a reform has changed the exit: deducted depreciation is now added back into the taxable capital gain on resale. The ownership advantage nonetheless remains intact, which keeps LMNP attractive for yield. Before committing, it helps to compare the options for financing a new home, as the loan structure drives net profitability.

Bare ownership, investing with a discount and no management

Buying in bare ownership relies on the dismemberment of property. The investor acquires the walls of the new home, while a landlord, often institutional or social, holds the usufruct for a period set in advance, generally 15 to 20 years. During this period, the usufructuary manages the property, collects the rents and bears the charges.

The appeal lies first in the price: bare ownership is bought at a discount of 30 to 40% compared with full ownership, depending on the length of the dismemberment. The investor receives no rent but bears no management, charges or property tax, and bare ownership is excluded from the real estate wealth tax (IFI) base.

This scheme targets a specific profile: a heavily taxed taxpayer, possibly liable for IFI, with a long horizon and no need for immediate income. At the end of the dismemberment, they recover full ownership of a property restored to good condition, with no additional taxation on reconstitution. The benefits of buying new-build, notably the builder guarantees, further secure this kind of wealth operation.

The property deficit, a scheme poorly suited to new-build

The property deficit is regularly mentioned, but it must be clear: it fits new-build poorly. The mechanism applies to unfurnished rental and relies on deducting works that exceed the amount of rent. The resulting deficit is offset against overall income, up to 10,700 € per year, with the surplus carried forward against property income for the following ten years.

Yet a new home requires, by definition, no major deductible works. The property deficit is therefore relevant to older property to renovate, not to a new development. It is mentioned here to be set aside knowingly: an investor seeking to reduce tax through works will turn to older property, while new-build favours LMNP or bare ownership.

Comparing the three schemes

The table below summarises the key features of each scheme applied to a new-build investment.

Which scheme for your profile

The choice depends less on tax theory than on three concrete parameters: the need for income, the level of taxation and the investment horizon.

“The property deficit offset against overall income is capped at 10,700 € per year.” — Article 156 of the French General Tax Code, 2026

This legal ceiling shows why the property deficit only really triggers with a large volume of works, absent from new-build. Conversely, LMNP and bare ownership draw their advantage from the very nature of the new asset.

A method to decide

1. Need for immediate income: favour LMNP under the real regime, which generates lightly taxed rents as soon as the property is let.
2. High taxation and long horizon: lean towards bare ownership, which wipes out income taxation and eases IFI during the dismemberment.
3. Willingness to reduce tax through works: leave new-build and target older property to renovate via the property deficit.

Whatever the scheme, the quality of the location and the developer remains decisive for final profitability. In a tight market, relying on the best property developers in the Yvelines and on well-served areas secures the property’s long-term value.

Frequently asked questions