Borrower Insurance: The Lemoine Law for Business Loans

Real estate: what future for Pinel and PTZ in 2023?

In the middle of the parliamentary debate on the Finance Act for 2023, many real estate agents are wondering about the future of Pinel and PTZ. Threats weigh on these two units, the first intended for rental investors, the second for first-time primary home buyers. Will real estate again be the poor ratio of budgetary measures? Pinel in the hot seat The Finance Act of 2022 allows for the extension of the rental investment scheme under the Pinel Act until 31 December 2024, when it was originally supposed to be abolished at the end of 2021. However, the conditions for accessing Pinel are evolving, with a decrease in the tax advantage from January 2023, except for goods acquired with high environmental criteria. As a reminder, this system makes it possible to rent new unfurnished homes at a limited rent, for tenants who respect the resource conditions and use the home as their main residence. Le Pinel has only been refocused on narrow areas (A, A bis and B1), those where demand exceeds rental supply. From 2023, to hope to benefit from a full tax reduction (up to 21% of the purchase price for a tenancy commitment of 12 years), the home must meet various criteria: be located in a neighborhood priority in the council’s policy; demonstrate an energy and environmental performance level above the threshold set in the applicable regulations; respect a minimum surface per typology. All these criteria must be taken into account because the legislature has the art of retreating when it comes to public finances. An amendment to the Finance Act for 2023 presented by deputies from the Renaissance Group (formerly LREM) recommends an early eradication of Pinel at the end of 2023, regardless of its form. Professional construction organizations consider the project dangerous, while the country is experiencing a housing crisis, or rather mortgage loans, in a context characterized by rising interest rates and the stalemate in the 2022 wear rates. Half of the construction of new homes depends on Pinel. The extinction of the unit would be a huge deficit for the state (especially in terms of VAT), in addition to causing the loss of thousands of jobs. The planed PTZ Created in 1995, the zero interest loan or PTZ is granted, subject to funds, to households to finance part of the acquisition of their first main residence in the new or, from 2005, in the old. In 2018, PTZ was refocused on zone A, A bis and B1 for the purchase of new homes and on zone B2 and C for the purchase of old homes to be renovated. In these last two areas, however, the new PTZ was maintained, but with a loan quota reduced by half (20% instead of 40% of the amount of the operation). Since 2020, the allocation of PTZ in the old is conditional on the compliance with a criterion of minimum energy performance after work. The Finance Law for 2022 extended the distribution of PTZ until December 31, 2023. However, an amendment to the draft Finance Law 2023, still at the initiative of the Renaissance group, intends to reduce the allocation of PTZ to housing that meets high environmental criteria which would be specified by decree in June 2023. The text also and above all wants to remove PTZ in zone B2 and C, i.e. around 80% of the French territory. Again, this measure, if passed, could deal a fatal blow to the real estate market. Thanks to the fall in debtor rates, PTZ had lost its appeal. From 350,000 PTZ distributed in 2011, the number has fallen to 70,000 units per year. With historically low interest rates, around 1% over 20 years at the end of 2021, PTZ had little interest financially, but the increase in rates since last March, followed by a further increase in rates in October 2022, is changing the situation. PTZ has proven to be effective in facilitating access to property for low-income households by reducing the overall cost of mortgages and allowing a grace period of up to 15 years. In many cases, the property acquired through a PTZ is resold before repayment begins. With loan rates above 2% over 20 years, PTZ is currently making it possible to significantly reduce its debt ratio. The planned abolition of PTZ in non-tensioned areas will penalize first-time buyers who are already penalized by the additional costs associated with the new RE2020 environmental standards and the increase in the price of building materials.

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