Source: BIPE, SGFGAS, Sitadel2, FPI.
1. Save money wherever it is possible
The PTZ (zero interest rate loan) - the main public subsidies granted to households accessing the property - will
be extended for four years but targeted in tense areas. The conditions for eligibility may not change. But 60% of the households
who benefitted from the subsidies in 2016 were located in non-tense areas. A change in this public program may thus impact
the new housing construction activity.
Housing policy costs around 40 billion per year, of which 18 billion for the housing allowance APL
A general 5 euros cut on the monthly allowance taking effect on October 1st and sustained in 2018 has been announced,
for an annual saving of 392 million euros. The government has also announced an additional effort of 1.4 billion euros concentrated
on the social park, which receives 45% of housing subsidies. The plan is to first ask the social landlords to lower by 50,
the rents of their tenants benefiting from the housing allowances, (ie 2.5 million households), which will reduce the amount
Finally, a more reactive management of housing allowances APL calculated on the resources of the current year
rather than on those of two previous years, promises significant gains. As 26% of the beneficiaries change their professional
or family situation each year, these developments are taken into account only belatedly, generating numerous returns and recalls,
for more than 1.6 billion euros.
With this measure the Governments hopes to save more than 1Bn .
2. Social housing overhaul
It is a revolution of the French model of social housing - which was not on the program of candidate Macron - that the government
The Government will force the social landlords to reduce their rents by 50 to 60 per month for every social house,
and will negotiate some compensations for the actors. To replenish the finances of the HLM, the government confirmed a rate
freeze of the Livret A at 0.75% p.a. for two years, a gift of just a few thousand euros and the extension of loans granted
by the Caisse des Dépôts. The government is also planning to sell around 40,000 social housing units per year to their occupiers,
compared with 8,000 to 10,000 currently.
The idea for the Government is to save budget for the State, and to encourage social landlords to build more social housing
thanks to a better access to funding.
3. Reorienting savings towards productive investment
The other main public subsidies, the tax benefit scheme PINEL, granted to individuals purchasing housing to rent,
will also be extended for four years but targeted in tense areas. Thereby, dozens of cities may not be eligible anymore to
this program. This will clearly impact the new housing construction activity but not immediately due to the inertia of all
the houses orders made by the end of 2017 and still to be built.
Property owners who rent one or more properties should also undergo two tax developments in 2018. First, the increase of 1.7%
of the CSG tax from January 1st, 2018 that will affect their land revenues. Second, the wealth tax will be focused on their
real estate patrimony.
Finally, some savings devices as PEL and assurance vie, that are partially dedicated to investment in real estate, will be
taxed from now on.
All this package is not a great signal for the housing construction market.
4. Support the construction thanks to a supply shock
In order to accelerate land release and rapidly build housing, strong tax relief will be granted by the State on real estate
gains for the sale of land in tense areas for three years from January 1st, 2018. This allowance will be 100% for the sale
of land to build social housing, 85% for intermediate housing, and 70% for private housing.
It was a promise of candidate Macron to facilitate housing for young people. Students, apprentices, trainees, too often give
up their training because of lack of housing. For all young people under the age of 30, a "mobility lease" for a period of
one to ten months, suitable for a roommate, without guarantee deposit but with a simple and free guarantee called Visale issued
by Action Logement, will be created. The Visale guarantee already exists, but in 2016 it was only issued for 8 000 contracts,
consuming only 20% of the appropriations foreseen.
Also, 80,000 youth housing units will also be built during the five-year period, of which 60,000 will be for students, 50
per cent more than under the previous government.
And last but not least, the French Government is willing to reduce the construction costs by reducing environmental and social
standards in order to obtain "massive production" of new housing in a few years.
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Mr. Youssef YacoubiEUROCONSTRUCT FranceBIPE is solely responsible for the content and any images on this page.