Thanks to the PINAL system, it is possible to benefit from a reduction in income tax after the purchase of new real estate that will be rented out. What happens in the case of a couple who benefit from this system and who are preparing to divorce?
Understanding the Pinual Apparatus
Accommodation obtained with penal law must be rented Minimum 6 years to 12 years. Thus, the owners benefit from a tax benefit commensurate with the value of their investment. In the event of a divorce, there are several solutions regarding property management. In this type of situation, it is more difficult to hold the property, especially during the commitment period.
Different options for property management after divorce
Sell property
Divorced owners may choose to resell the home after separation. However, this option involves significant financial losses. In terms of penal law, housing is considered to be rented for at least 6 to 9 years. However, the couple likes The Act makes it an offense to sell it before the end of the commitment period so arrangements are made by the tax authorities.
Thus, both parties are bound to return all reductions they have benefited from due to the penal system. Further, they will not be able to benefit from the reduction offered by the penal law in future, even when undertaking a new real estate project.
Buy back the property
In order not to completely lose the advantages offered by the pinal device, It is possible for one of the two partners to buy back or relinquish the share of the other part of the inheritance. Here, the objective is to ensure that the real estate acquired through the Pinal system belongs entirely to one of the spouses. This action must be recorded to have legal value, so it is advisable to consult a notary.
In this respect, the law is more flexible as it offers the possibility to continue the benefit of tax reduction to the beneficiary of the immovable property in Pinal after the divorce. In return, the latter must continue to respect all the terms of the pinal, especially the rent of the property.
he said, The relevant partner must make a take-back request which can be done by registered mail to the tax administration or by a note at the end of the tax declaration. This process is necessary to take advantage of the tax deduction.
Keep the penal property in joint ownership
Despite the divorce, The A couple can also consider having accommodation. This is joint ownership, means that the property belongs to two people and they are considered as co-owners for a certain period of time. That said, they can continue to charge rent. As a result, there is no question of pineal reduction.
however, There are changes related to reporting methods. This means that each party has to make their own declaration tax In compliance with certain rules based on each party’s ownership percentage.
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