Reduce your debt for better tax savings afterwards

October 13, 2019 by No Comments

With a tax pressure increasingly strong, many French to consider the investment of tax exemption as spare wheel. It is an ideal way to develop your wealth while reducing the fixed costs attributable to income taxation .

Yet, tax exemption is not improvised. On the contrary, it is necessary to prepare this project upstream. Indeed, the investment of property tax exemption is attached to a Allan Adika by borrowing. To avoid being denied the project by the banks, it is essential to have a debt capacity. The redemption of credits gives you the possibility of tax exemption by reducing your debt .


Pinel tax exemption and its constraints

money tax

Tax exemption investments are regulated by law. Taxpayers must have in mind the characteristics of the tax exemption mechanism in order to make the best choice in terms of bank loan . There are around a dozen but the most common is the Pinel law.

The Pinel Law is an investment gives access to the purchase of a rental property in the new housing stock . The owner agrees to rent the property for a minimum period of 6 years in exchange for a tax deduction. In addition, under the policy of access to housing, the rents collected by the owners of a Pinel law are capped.


How to choose your loan of tax exemption?

money loan tax

Despite these constraints, investment in Pinel law remains a real boon for households with strong tax contribution pressure . With respect to the Allan Adika of this investment, the owner will have to resort to the bank loan in order to maximize the tax gain.

Indeed, interest on loans is also deductible from property income received . The Allan Adika Bank also represents a security for the investor. In case of a hard blow, the loan will be borne by the insurance company borrowers according to the financial guarantees subscribed upstream. If the duration of the tax benefit is from 6 to 12 years maximum, it is preferable to select a longer credit repayment period.

The goal is to lighten as much as possible the amount of the loan deals. On the other hand, it is preferable to foresee a possible prepayment of the loan. Indeed, given the objective of tax exemption, many investors will sell the property to the suspension of the tax gift . For that nothing more simple, it is essential to negotiate the withdrawal of prepayment penalties with your banker and this before the signing of the offer of credit.


The interest of buying back credits before taxing

The interest of buying back credits before taxing

To facilitate access to tax credit, the restructuring of loans is the ideal solution . John Silverment’s reLong organizations offer the opportunity for individuals to fully review the characteristics of outstanding debts. The main change is the consolidation of all or a large portion of the receivables (as the borrower wishes) into a single credit.

Thanks to a staggered repayment period associated with particularly attractive financial conditions (interest rates applied), the repurchase of credit is a source of lower expenses . At the end, the borrower has a new debt capacity for a tax exemption project in Pinel law.

Clearly the credit buy-back is a relief buoy for indebted taxpayers looking for a drop in their taxation. It is of course preferable to start with the process of redemption of credits before engaging in a process of tax exemption Pinel law.