As France's new-build housing market faces serious challenges, the government and deputies are looking for ways to support and develop it. Recent discussions in the National Assembly focused on key measures aimed at bringing the housing market out of the crisis. The focus was on tax initiatives and programs that could stimulate demand and facilitate the purchase of new houses.
In this article, we will look at the major proposals and their potential impact on the real estate market.
The Pinel program, inheritance and gift tax exemption
Currently, the market is gradually recovering due to lower mortgage interest rates. Demand for housing exists, but it needs support - however, the Pinel tax credits will not be extended and will expire after December 31, 2024.
At the same time, the Minister of Housing is in favor of tax breaks related to the purchase of new homes:exemption from gift and/or inheritance tax. Support for this initiative comes from the deputies of the Republican Party (LR) and the National Association (RN), as well as the Federation of Real Estate Developers. The proposal has already been approved by the Finance Committee of the National Assembly and will soon be debated during the session.
Deputies also propose to exempt gifts to descendants (children, grandchildren, etc.) from tax if the amount will be used to buy a new home within 12 months of the law coming into force, which is scheduled for January 1, 2025. The maximum amount per donor is €150,000 (instead of the current €100,000).
There are 3 basic conditions :
1. The real estate must be the primary residence of the recipient;
2. It must be used either by the owner, his or her spouse or children, or be rented out
3. The rental rates must not exceed the Pinel Program's rental rates.
Zero interest loan program for new constructions (PTZ)
Another positive news is the return of the zero interest rate loan (PTZ) program for new homes. At the moment, PTZ is only available on the purchase of old or new apartments, but only in regions where demand for housing exceeds supply.
During a speech on October 1, Prime Minister Michel Barnier advocated extending the PTZ program to all first-time homebuyers across France. Extending the program to all new buildings would provide housing for about 15,000 more families by 2025.
Thus, the proposed tax incentives represent important steps towards the recovery of the new housing market in France. These measures may simplify the home buying process for new homeowners. The decisions are expected to have a significant impact on the real estate market in the coming years, increasing the number of available new buildings and strengthening the market.
