My Property
Why buy a new-build apartment?
Buying new-build you can enjoy many advantages. New property can bring savings compared to old-build, e.g reduced solicitor's (Notaire) fees. But that is not the end of it. On the contrary.
Your bespoke apartment: imagine having your home exactly as you want it. New-build can give you exactly what you want.
Low energy consumption: new standards mean that new-build apartments are very well insulated (retaining heat and reducing noise) and have very energy-efficient heating systems.
A turnkey home: from the day your apartment is delivered you are at home. No extra work to be done, no wasted space.
Guarantees against all defects. The 10 year guarantee gives peace of mind against any risk of structural defects on a new building. The two year guarantee protects you against defects in removable features such as doors, heating installations…
Reduced costs: buying a new dwelling means solicitor's (Notaire) fees are reduced to about only 2 to 3% of the price. In old-builds, these fees are more than 6%…
In a nutshell why buy a new-build?
Energy efficiency or reduced Notaire fees compared to old-build means that buying new means you have a home with all the guarantees to help you start your new life.
Loi Pinel 2014, Loi Pinel Tax relief on Property
From 1 September 2014 the Pinel Law (Loi Pinel) replaces the loi Duflot in connection with Investment Property for Rental. How does the Loi Pinel work? Who can benefit from it?
Any taxpayer resident in France purchasing between 1 September 2014 and 31 December a new-build, or new-build off-plan, can benefit from the Pinel system. The LOI PINEL, following on from the Duflot law, entitles those eligible to a reduction in income tax up to 21% over 12 years.
Amount of tax relief With the Loi PINEL?
The Pinel tax relief is calculated on the price of the property. It varies according to the length of time the property is rented out.
Chart showing the rates of tax reduction
Loi PINEL dispositions:
Duration
Loi Pinel over 6 years
Loi Pinel over 9 years
Loi Pinel over 12 years
Pinel* Tax Reduction Rates
12 %
18 %
21 %
Loi Pinel: conditions to be adhered to
The PINEL legislation's aim is to encourage a new supply of homes in France. A number of conditions apply.
RENTAL CONDITIONS OF PINEL LAW:
• The owner must rent the property as the main residence of a tenant.
• The rental period must be at least 6 years.
• The dwelling must be rented out within 12 months of it being delivered (DAT).
• The owner undertakes to adhere to the defined upper limits for rent and income of the tenants.
CONDITIONS FOR TAX RELIEF ELIGIBILITY
• The Pinel tax reduction cannot be combined with Duflot, Scellier, Censi-Bouvard, Malraux legislation or historic monument status.
• Pinel legislation is covered by the upper limit to tax avoidance loopholes of €10,000 annually.
How to take advantage of the loi Pinel?
WHICH PROPERTIES ARE ELIGIBLE?
To be Pinel eligible the property must have been built to BBC standards: RT 2012 or BBC2005 building regulations, and must be located in a town or city situated in a Pinel area. The following investment classes are eligible for Pinel relief:
• A new or off-plan (VEFA) dwelling
• Building a dwelling;
• Purchasing an unfinished dwelling to complete it;
• Shareholding in a SCPI (Rental Property Investment Company in French Law)
PTZ+ : a mortgage for all!
Since 1 january 2011, the Zero Rate Loan, the Pass Foncier (Property Pass) and tax relief on mortgage interest have been replaced by the Prêt à taux zéro renforcé (Reinforced Zero Rate Loan), also known as PTZ+. Open to all first-time buyers regardless of income, it aims to simplify and optimise help to buy schemes.
Who is this intended for?
To all first-time buyers, i.e. those who become owners of their main residence for the first time, or who were not owners in the last two years. No more income restrictions! This allows those who could not benefit from a standard PTZ (Zero Rate Loan), particularly middle-income groups, to apply for it. Finally, the PTZ+ is available to those wishing to purchase both new-build or old-build.
What is the repayment period?
The repayment period depends on income and family size. It can vary from 5 to 30 years, the longer periods being reserved for lower income families. To calculate the repayment period, there are 10 income brackets (compared to 5 previously) to ensure the loan is right for the particular circumstances of the family.
Where to get information about the PTZ+?
Banks, local housing information services and the website www.service-public.fr have information about the PTZ+. To find out if you are eligible for the zero rate loan+ and find out the loan amount and the repayment period, you may also submit your data to a loan calculator at:
http://simulateur.developpement-durable.gouv.fr
Please go to "Our Developments" section to find out more about our programmes. We are of course at your service to give you any other information you might require.
What is it?
The Reinforced Zero Rate Loan is a mortgage to buy a first home, where the interest payments are covered by the State, with no administration fee. The government hopes that this zero rate mortgage will see the number of home owners rise from 58% to 70%, and that 380,000 loans will be agreed each year. This overhaul of the system should also be positive for public finances. The government estimates the annual cost to be 2.6 billion Euros compared to the current cost of 2.8 billion Euros (PTZ + tax relief).
What amount?
The amount cannot be more than half the total mortgage amount used to finance the same operation (PTZ+ cannot be more than half the total loan amount). In order to account for market variations the amount of the zero rate mortgage varies according to where the property is situated, to its energy efficiency, its status (new-build or old), and family size. Thus the amount of the PTZ will be greater in areas where the property market is tighter. This is the case in zones A and B1 (Paris region, Mediterranean coast, regional capitals and frontier zones). The amount will also be higher for new-build dwellings rated BBC for energy efficiency or old-build EPC rated A to D dwellings (i.e. those with energy requirements of less than 230 kWh/sqm/year). The upper limit of the loan may also double, for example for a family of three individuals with a monthly income of €2,000 buying an old-build dwelling in zone B2.
What is the loan upper limit?
LThe upper limits have been increased to be a better fit to market prices. For old-build the limit rises from a range of €41,000 to €123,000 previously, to €79,000 to €285,000. The upper limits also depend on the family size. A family of four individuals purchasing a new-build could avail of a PTZ of €312,000 in zone A, and €158,000 in zone C. For a family of five individuals the maximum mortgage amount would be €359,000 in zone A. The borrower can adjust the PTZ+ on request; reducing the loan by half at the most if the repayment period is less than or equal to eight years, or by reducing the first repayment period to a minimum of four years.
Mortgage: 2.5% average rate in October 2014
Can mortgage interest rates go any lower? In October 2014 interest rates agreed on loans contracted to finance property were 2.5% on average, excluding borrower insurance, and sureties, according to the Observatoire Crédit Logement/CSA.
In its monthly bulletin published on Tuesday 4 November, the Observatoire shows that mortgages for the purchase of an old-build dwelling get lower rates than for the purchase of new-builds (2.49% compared to 2.56%). The fall in rates continues: over a single month they lost 9 points (2.59% in September). Since the beginning of 2014 they have plummeted by 58 points, according to the Observatoire.
Moreover Crédit Logement/CSA indicates that the repayment period stabilised in October at aroung 208 months, i.e. 17years and 4 months on average. Over recent months the Observatoire identified an increase in repayment periods, a sign that banks are offering long-term loans (20 years or more) more easily. These are the loans many buyers depend on to finance their property purchase.
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