The new interest loan, a safe haven for Sarkozy

Encountering building professionals and real estate yesterday in the Val-de-Marne, the head of state has reinforced the assistance to prospective homeowners device.

Make France a country of owners: struggling, Nicolas Sarkozy goes on and revisit the fundamentals that enabled him to conquer the Elysee. After surfing all summer on the issue of insecurity, the President of the Republic yesterday held another theme of his 2007 election campaign: the homeownership.

The subject is acclaimed: an Ipsos poll in February 2009 on behalf of the Land Bank showed, for example, that 83% of French consider it necessary “to provide an opportunity for every individual to own.” Nicolas Sarkozy has set itself a goal: that two-thirds of the French are becoming homeowners, against 58% today. To achieve this, a “PTZ-Plus” (zero-rate loan helped more by the state) will be created under the 2011 budget law.

The Elysee had neglected nothing to spare the announcement effect: field visit to a construction site in Villeneuve-le-Roi (Val-de-Marne), photos and shaking hands with construction workers, meeting with those seeking access to the property, elected officials and real estate professionals in Thiais.

The “ready-to-zero rates more,” how does it work?

As the name suggests, the free loan allows homebuyers to finance in part the acquisition of their homes with a loan without interest. That is at 0%. The PTZ-Plus will be granted without a means test, but only for first-time buyers (those who buy housing for the first time). It is the State that pays interest in the form of a tax credit on profits, granted to banks.

In principle (money at 0%) PTZ-Plus builds on the former PTZ. Except that government endowed the financial resources significantly larger device: 2.6 billion euros per year against 1.2 billion currently. The extra money is used to provide loans without interest to a much larger amount, especially in geographic areas where property prices are sky high: Ile-de-France, Paca and some departments of the Rhône -Alpes or the Atlantic coast. The new device also encourages the construction of new housing in BBC (Low Consumption Building).

The envelope of the PTZ-Plus also increases with family size, since it takes a larger and therefore more expensive housing to accommodate more people. Finally, the loan repayment duration varies by income buyers: for the least affluent households, the loan can be up to thirty years. A multitude of criteria (geographic, family, ecological …) will be used to determine the loan amount. Example: Area A (where prices are at the zenith), a couple with two children who buys a new property will be entitled to 93 PTZ 600 euros (800 euros and 124 for a BBC) against 27,500 euros previously. In areas where real estate is cheaper, the loan is lower: 34 200 euros for a family with two children.

The government expects 380,000 beneficiaries PTZ-plus per year at cruising speed, as against 200 000 to 250 00 currently. Provided that real estate professionals do not take advantage of this aid to increase all prices, wiping out public intervention. Yesterday, Sarkozy put them on guard against such abuses.

Why a new system?

Upon his arrival at the Elysee Palace, Nicolas Sarkozy had to vote under the law Tepa tax deduction on mortgage interest supposed to “make France a country of owners”. Failure on the line: only households with the means to buy benefited from the reduction. However, the measure was of no help to the families who were unable to complete their acquisition budget.

Socially ineffective, this measure was a very expensive addition: 3 billion euros per year at cruising speed, to which was added the cost of the former PTZ ($ 1.2 billion). Either 4.2 billion public spending accession. In this time of hunt kennels, had to stop spending. The new PTZ-Plus supplants the deduction for a cost of 2.6 billion. This fact, on arrival, a saving of 1.6 billion.