Zero interest loan in France

The Rate Loan zero (PTZ) is, in France, a bank loan or social or socio-environmental (Eco-PTZ), established in 1995, the interest rate is equivalent to 0%. The amount granted for this loan is based on the borrower’s taxable income (justified by his tax notice ), and the location of his real estate purchase. It is notably framed by the Code of Construction and Housing and the General Tax Code .

Taxation

For tax purposes, the interest loan is a “reimbursable loan bearing no interest” and should therefore be declared to the tax authorities by the credit institution (bank, broker real estate loan).

State participation is through a credit to the credit institution equal to the amount of interest not collected.

The credit institution also declares any partial or total repayment of the loan at zero rate, as well as the client’s non-compliance with the conditions for granting the loan (non-compliant tax notice), the conditions relating to the assignment. housing as a principal residence and minimum surface and living conditions.

Origin and History

In 1995 , the initiative comes from the French government . It was originally intended to help low-income French people become ” first-time home buyers ” (owners for the first time of their main residence ).

Accompanying necessarily a bank loan called principal loan , the zero rate loan is very often taken into account as a personal contribution by the banks.

The Finance Act of 2005 introduced a new device that strongly reinforces the PTZ by allowing households to acquire new or old housing without conditions of work. The opening of the zero-rate, unconditional loan to the former seeks to promote homeownership in agglomerations where the supply of new homes is limited and the rental market is very tight.

In February 2006, the resource ceilings were re-evaluated for Zone A.

In 2014, the PTZ is reinforced (the st October 2014) to promote homeownership, supposed to be a construction recovery factor.

In 2015, to revitalize several thousand town centers, the Minister of Housing opens the PTZ to some rural areas, and publishes a new map of 6000 rural municipalities eligible for PTZ (for the purchase of old housing to rehabilitate, from 2015 , the improvement works must account for at least 25% of the total cost of the operation). The communes were chosen according to their level of services and equipment, as well as their potential for housing to be rehabilitated that could be put back on the market 1 .

Zero Rate Plus Loan

As part of the 2011 Finance Act , the new PTZ plus (or PTZ +) supplements, from January 2011 the previous device, with increased ceilings, percentages (of the amount of the transaction) depending on the geographical location and energy performance, to encourage the renovation of old homes before they are resold, and to encourage first-time buyers and build dwellings in areas that are most lacking. It concerns the old and the new by merging three measures: the PTZ, the Land Pass and the tax credit (deductibility of loan interest). The loan is more important for BBC housing (ex: 40% against 20% previously), within the limit of 312 000 euros(against 137 000 euros previously). According to the impact study annexed to the implementing decree (Official Journal), the budgetary cost of the PTZ + will be € 1.95 billion for 2011, and € 2.6 billion / year. According to Benoist Apparu, 57% of the French are owners, “the PTZ + aims to help about 380,000 beneficiaries 2 . To limit its cost to 800 million a year, the National Assembly decides to refocus the device on the only new housing. While the Senate subsequently restored the PTZ + in old housing, the Finance Committee of the National Assembly decided to reintroduce the text voted in first reading, adding however an amendment allowing the purchasers of housing HLM to benefit despite everything of the device 3 .

The eco-PTZ

It aims to encourage (at least until 31 December 2015 4 ) the energy renovation of old housing to improve their energy performance, in order to reduce the energy bill for housing and greenhouse gas emissions in France. It is open (without means test 4 ) to “owners of housing built before 1990” , occupied as a principal residence (by the owner or by a tenant) and also to the co-owners  unions “for work on common parts and equipment ( collective boiler for example) and the private parts if they are of collective interest (windows for example) “. The housing benefiting from an eco-PTZ can not be transformed into commercial or professional premises, nor rented seasonally, nor used as a second home until the eco-PTZ is not fully reimbursed 4 .

In December 2014, an interministerial decree 5 amended the decree of 30 March 2009 6 by reiterating the nature and technical characteristics of the energy saving works eligible for the eco-PTZ; this decree brings the technical eligibility criteria of the eco-PTZ closer to those of the sustainable development tax credit (CIDD) 7 .

In 2015, its scope (types of eligible work) was clarified by four texts published in the Official Journal. The attestation of the conformity of the works (which until then had been the responsibility of the banks) is on this occasion and by decree 8 transferred to the companies, because the banks considered themselves incompetent in this field, which made them reluctant to grant this type of loans. 9 . The decree lists the administrative penalties for companies that do not fulfill their obligations and, to encourage the thermal renovation of condominiums, it adds an application for “eco-PTZ condominiums” of a higher remuneration than that applicable to eco-PTZ allocated to individuals “, adds the Ministry of Housing 9 .

Eligible works include thermal insulation of roofs, walls, glazed walls and doors leading to the outside, work on efficient heating or hot water systems or using a source of energy renewable (RE).

A decree also makes eligible (as of st January 2015) to eco-PTZ work “induced” (work “inextricably linked to energy saving work”) 10 . The government target was 100,000 eco-PTZ granted annually (30,000 in March 2015 according to Actu-Environnement 9 ).

It should be noted that the eco-PTZ is also available for renovation of non-collective sanitation installations , but only for ecological devices, whose operation does not require electricity, such as compact filter or traditional channels. The micro-purification stations are thus excluded from the device 11 . Non-collective sanitation is indeed a real public health issue because it concerns 5 million homes, equivalent to 12 million inhabitants in the French territory. The release of untreated sewage into the wild can lead to health disasters such as the cholera epidemic in Haiti.

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Like the rest of home ownership aids, he is accused of feeding rising real estate prices. According to Henry Buzy-Cazaux, president of the Graduate School of Real Estate Professions, “the new zero-interest loan risks maintaining price increases in Paris and the regional capitals” 12 . For the economist Jacques Garello , feeding a false sense of gratuity, “it causes false decisions” and skews the functioning of the real estate market. In addition, he feels unfair that it is ultimately the community that pays to allow a few to become homeowners: “There is bound to be someone who pays the equivalent of the interest the borrower is exempt from . And this someone is the taxpayer. » 13

In the opinion of many beneficiaries of the zero-rate loan, the PTZ benefits mainly the banker who receives subsidies for the first three years and leaves the problems of early redemptions, poorly mounted files and other needs to rent, to the bank. borrower who can be asked to repay to the state this grant received by the bank. [By whom?] [Ref. necessary] [not neutral]

Notes and references

  1. ↑ Légifrance: Decree of 30 December 2014 concerning the geographical scope of loans bearing no interest granted to finance first-time buyers operations in the former conditionally work [ archive ]
  2. ↑ Batiactu Letter  [ archive ] 2011/01/04
  3. ↑ Lyon Realty Pole  [ archive ] 2011-12-14
  4. ↑ a , b and c Eco-loan at zero rate (eco-PTZ) [ archive ] , updated on 01.01.2015 – Directorate of Legal and Administrative Information (Prime Minister), accessed 2015-04-08
  5. ↑ Decree of 2 December 2014 amending the Decree of 30 March 2009 on conditions for implementing provisions for interest-free loans for the financing of renovations to improve the energy performance of housing anciensTexte  [ archive ]02 / 12/2014, published in the Official Journal on 04/12/2014.
  6. ↑ Order of 30 March 2009 [ archive ] on the conditions for the application of provisions concerning repayable interest-free advances for the financing of renovation works to improve the energy performance of old dwellings , Text of 30/03/2009, published in the Official Journal of 31/03/2009.
  7. ↑ ICSD defined by Article 18a of Annex IV of the General Tax Code
  8. ↑ Decree No. 2014-1437 of December 2, 2014  [ archive ] on interest-free loans for the financing of renovations to improve the energy performance of existing homes; Text of 02/12/2014, published in the Official Journal on 04/12/2014.
  9. ↑ a , b and c Radisson, Laurent (2015) Energy renovation: the scope of work eligible for eco-PTZ specified [ archive ] , December 04, 2014
  10. ↑ Decree No. 2014-1438 of December 2, 2014  [ archive ] , relating to interest-free loans for the financing of renovations to improve the energy performance of existing homes; Text of 02/12/2014, published in the Official Journal on 04/12/2014.
  11. ↑ ” Financial aid for standalone sanitation – GoDurable “, GoDurable , {{Article}} : ” année ” or ” date ” missingparameter ( read online  [ archive ] )
  12. ↑ “The new zero rate loan is likely to maintain price increases in Paris and regional capitals”  [ archive ]
  13. ↑ Towards the abandonment of the loan at zero rate?  [ archive ] , September 2004

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