Real estate Many changes in 2024

More flexible access to credit

The French High Council for Financial Stability (HCSF) and the Ministry of the Economy, in collaboration with the Banque de France, have recently relaxed the conditions for access to real estate credit, in order to boost the market and make access to credit more flexible, while maintaining standards of financial prudence. Banks :

• can offer home loans of up to 27 years for borrowers who undertake work representing at least 10% of the total amount of the transaction. This measure facilitates the acquisition of properties requiring major renovations, by extending the repayment period;
• are authorized to exclude the interest cost of bridging loans from the calculation of the effort ratio, on condition that the bridging loan does not exceed 80% of the value of the property sold. This approach helps buyers who acquire a new property before selling their old one, by lightening their initial financial burden;
• can temporarily exceed the 20% threshold for exceptions in one quarter, provided that this rule is respected in subsequent quarters. This flexibility enables banks to better adapt to the specific needs of borrowers and fluctuations in the property market.

New conditions for MaPrimeRénov' scheme

As of January¹, the MaPrimeRénov' scheme has undergone major changes, refocusing its financial support on comprehensive home renovation and energy efficiency. These changes are designed to encourage more comprehensive and efficient renovation work. Here are the main adjustments

• homeowners will now have to undertake at least two types of work to be eligible. For example, wall insulation combined with the replacement of an old boiler with a heat pump is required. This approach is designed to encourage more comprehensive and efficient renovations;
• the work carried out must improve the home's DPE by at least two classes. This requirement ensures that renovations deliver a significant improvement in energy efficiency;
• assistance for the installation of geothermal air/water heat pumps has been doubled, from 1,000 to 2,000 euros, for low- and middle-income households. However, this assistance will be reserved for homeowners whose property has a DPE classified between A and E, thus excluding the least energy-efficient homes;
• MaPrimeRénov' expands its scope to include summer comfort. Devices such as reversible air/air heat pumps, air fans and solar protection for glazed surfaces will now be eligible. This extension recognizes the importance of thermal comfort in summer, and encourages the installation of appropriate solutions;
• the introduction of a new supported pathway for households wishing to undertake renovation work that will enable them to aim for an improvement of at least two classes on their Diagnostic de Performance Énergétique (DPE). The program, open to all regardless of income, replaces MaPrimeRénov' Sérénité and the MaPrimeRénov' global renovation package. It offers comprehensive support from a trusted third party, Mon accompagnateur Rénov', covering technical, administrative and financial assistance. The cost of support will be covered according to income, and can reach full coverage for the most modest households, with a ceiling of up to €4,000 in certain cases. Financing rates for work will be increased, offering up to 90% coverage for very low-income households, for work costing between €40,000 and €70,000.

Final stretch for Pinel investment

The Pinel law for rental investment in new-build property is still valid until the end of 2024. However, the tax reductions granted are reduced, unless you opt for a property that meets the Pinel + criteria. For your information

• for a building permit filed after January^1, 2022, and a property purchased in 2023, the property must meet the new RE 2020 standards;
• for a building permit submitted after January¹, 2022, and a property purchased in 2024, the property must meet RE 2020 standards and be classified A in terms of the DPE ;
• The home must be located in a priority urban district;
• The home must have a private outdoor space (terrace, garden, balcony);
• minimum living space depending on the number of rooms: 28 m² for a one-room apartment (T1), 45 m² for a two-room apartment (T2), 62 m² for a three-room apartment (T3);
• from T3 upwards, a minimum of two openings must be available.

Quarterly revision of the usury rate

According to a press release from the Banque de France, "the introduction of a monthly review of the usury rate has enabled banks to keep pace with rising interest rates, and has given them greater leeway to adjust their rates". As loan rates begin to stabilize, the monthly adjustment is no longer necessary. This is why, from January 2024, the usury rate will once again be updated on a quarterly basis. This measure is designed to provide greater stability and predictability for borrowers and financial institutions alike. For loans over 20 years, the rate will be 6.29% in January 2024. Information on other loan terms and types will be published at a later date.

An overhaul of the zero-rate loan (PTZ)

The government has announced significant changes to the Prêt à Taux Zéro (PTZ), extending its application until 2027 and widening its accessibility, particularly for the middle classes. Here are the main changes to this scheme for helping people to buy their own home:

• a substantial increase in income ceilings for the first two brackets of the scale makes the PTZ accessible to more middle-class households. From now on, people earning between 2,500 and 4,000 euros a month, previously ineligible, will be able to benefit from the PTZ;
• the PTZ will no longer be available for new single-family homes. It will focus on new multi-family homes in high-tension areas, and on older homes in need of renovation in other regions. This change is designed to encourage collective housing in areas where demand is highest, and to promote the renovation of older housing stock;
• social housing tenants wishing to buy their own principal residence will benefit from a PTZ increased to 20%, compared with 10% previously. This measure is designed to facilitate access to home ownership for social housing tenants;
• the proportion of the property project that can be financed by the PTZ has been increased from 40% to 50%. This substantial increase will enable borrowers to finance a greater proportion of their real estate project with the PTZ, making property purchases more affordable.

A new tax system for furnished tourist accommodation

In the Finance Law for 2024, significant changes concern the taxation of meublés de tourisme rentals. These adjustments mainly apply to sales thresholds and allowance rates for taxpayers previously engaged in this activity. Taxpayers covered by the micro-BIC scheme for rental of furnished tourist accommodation benefit from a sales threshold of €188,700 and an allowance of 71%. Starting with income tax for 2023, the threshold will be reduced to €77,700, with a flat-rate allowance of 50%.
This measure is designed to combat the decline in the number of principal residences in tourist areas, a phenomenon of attrition caused by the boom in furnished tourist accommodation.