Guide
Differentiating the Scellier scheme and the Pinel law
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Written by: The Editorial Team
The investment principle of the Scellier scheme
The Scellier Overseas law was notably established to promote homeownership access for middle-class households. The public authorities at the origin of this scheme also sought to develop real estate supply in the Tropics. The Scellier tax relief for French overseas territories benefited a significant number of French taxpayers who wanted to make a safe financial investment. The reduction rates were 24 and 28% for respective rental commitments of 9 years and 12 years with the Scellier Reunion law.
An investor interested in an apartment in Saint Gilles had to apply these percentages to the property value to assess the savings they could make. Furthermore, the Scellier Ultramarine law gave the right to a tax benefit corresponding to 32% of an apartment's value for a rental commitment of 15 years. However, care had to be taken to distinguish the standard Overseas regime from the intermediate scheme. The Scellier Overseas law had a common point with the two schemes that succeeded it. This is the ceiling of the total investment amount, set at 300,000 euros per year.
Also read our detailed advice on an investment Pinel Law Overseas.
More restrictive ceilings under the Scellier law
The Scellier Overseas tax relief had advantages but the scheme currently in force presents considerably increased attractiveness. First, the Pinel Overseas law is characterized by a limit of a ceiling of 5,500 euros per square meter of living space, a ceiling that reached only 4,000 euros for any Scellier Overseas investment. Previously, the number of acquisitions was capped at one real estate property per year, the Pinel scheme has allowed since September 2014 the purchase of two real estate properties in the same year.
The possibility of housing one's children with the Pinel law
Furthermore, one had to rent one's apartment for 15 years to obtain a 32% reduction rate with the Scellier Overseas law, a rental commitment of only 12 years was sufficient to benefit from an identical tax reduction. Other advantages have existed since the implementation of the Pinel law. Scellier Overseas investment did not allow for housing ascendants or descendants, as with the tax relief schemes currently in force.
The current scheme is more advantageous
The tax relief tool available to households currently is more permissive. The minimum rental commitment period is 6 years with Pinel, it was 9 years with the Scellier Overseas law. We recall that it is the Duflot scheme that replaced it, then the Pinel scheme. A rental period of 9 years for an apartment of 150,000 euros gave the right to 36,000 euros in tax reduction with the use of the Scellier Reunion law, current legislation allows conversely to save 43,500 euros on the tax bill for this type of investment.
Find right now information concerning the Duflot laws, Pinel Overseas, Pinel Reunion, in order to be ready to make an Overseas investment.
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The editorial team
Passionate about overseas real estate, we follow daily the tax incentive schemes in the DOM-TOM. Our objective: to give you the keys to invest peacefully in Guadeloupe, Martinique, Reunion, Mayotte, French Guiana or Polynesia, with clear information and practical advice.
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