The Ready to strengthened zero: how it works?

To encourage home ownership and income households mean, but also to revive the construction industry and take a little growth, the government has significantly strengthened the Ready to zero (PTZ), one of the tools it has to revive the housing policy. The measures set out Monday by the Housing Minister Sylvia Pinel, and the Secretary of State for the Budget, Christian Eckert, aims to double the number of beneficiaries of PTZ households bringing the total to 120,000 in 2016.

During a trip to Nancy, October 29, Fran├žois Hollande announced its intention to improve the device. Yesterday, the two ministers went to the lab. The new PTZ will fund over France acquired an old housing with work; it may finance up to 40% of the amount of the purchase of real estate; the deferred repayment is extended, and the revenue cap of beneficiary households is raised. Deciphering the new device that will come into effect on 1 January 2016.

A PTZ strengthened for the purchase of existing homes across France

Now, PTZ may be granted for the purchase of existing homes rehabilitated throughout France. Conditions: the amount of work must be at least 25% of the total cost of the operation, or at least EUR 30 000 for a household whose total cost (purchase + rehabilitation) would be 120 000. Objective: provide work for small local businesses Building.
So far, PTZ was granted for the purchase of new homes or existing homes but only 6000 small rural municipalities (out of 36,000) where many houses are unoccupied. This was in essence to revitalize inner-villages that are dying.

An open PTZ strengthened to upper middle classes

Many more households will benefit from the strengthened Ready to zero rates, income limits have been raised significantly. Now, even the families of the upper middle class are eligible for public assistance, granted (as the name suggests) in the form of a loan at 0%, with interest paid by the state. Thus, in this new PTZ, a family with two children living in the Paris region and win up to 74 000 is eligible for the device.

The resource limits obey zoning: as you live in Zone A (the Paris region, the French Riviera and the French Genevois) in Zone B1 (big cities and some medium-sized cities) in area B2 (cities of over 50 000) or in area C (the rest of the territory, mainly rural), the income limit is not the same. This is to reflect the realities of the real estate market to buy the same housing surface must earn much more in area B1 in Area C, for example. The composition of the family also plays always to consider the needs of each household.

The table below shows the limits currently in force. The income reported is the taxable income less 10% reduction enjoyed by every taxpayer.

A PTZ reinforced with a much larger amount

Now the enhanced PTZ can finance up to 40% of the purchase amount of the property (18 against 26% previously) in the ceilings listed below. Thus, a couple with two children living in area A will be entitled to a loan that could reach up to 120 000 (40% 300 000). The rest of the financing of the acquisition is through a regular loan.

A PTZ strengthened with a greater grace period

To facilitate the return of their PTZ, the poorest households will benefit from a deferred fifteen years: so do commencenceront to repay the loan until the 16th year following the acquisition of housing. The idea is to allow roughly buyers to first pay their ordinary loan and to acquit PTZ thereafter. This smooth their effort in time. A period of 10 years and 5 years will also be granted to the middle and upper-middle classes depending on their income. Again, the idea is to smooth their effort.

It is also noted that the repayment term of PTZ may also be longer since it is extended to 20 years.
Most real estate professionals and those building welcomed these measures. But they committed themselves to anything. The government, as households have the interest to be vigilant, to ensure that players in these sectors will divert public support for their benefit by increasing their prices. Such drift is quite possible, these settings are not especially known for their ethical behavior.

In 2010, when the government of Francois Fillon had decided to extend the interest loan to purchase any type of housing (new and old) the measure had resulted in a record surge of Parisian real estate: +20 % rise in Paris in 2011. Faced with this calamitous drift, the Fillon government had refocused in 2012 PTZ on the only new housing, to extinguish the fire in prices in the former.

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