Friday, April 15, 2011

French Property 2011

The French property market will experience in 2011, a year full of changes: Scellier, zero-interest loans, energy diagnosis ...
The year 2011 will be a milestone year for the housing market in France. It will be full of changes both in the distribution of aid to purchase than for taxation. Here are the main developments affecting the market in 2011.

Energy performance in ads
Before 1 January 2011, the energy performance (ECD) was mandatory. But since this year, the result of this diagnosis (the note) must be mentioned in ads. The publication of this note is valid for both ads have showcased the agency or simply in housing ads posted on the internet.

The display of the ECD is not expected in the short term cause big changes. Buyers have not yet adopted a high sensitivity to ECD. However in the longer term, property with a low score may become less attractive. This will be reinforced probably more rural area where demand is less strong. In large cities, this phenomenon of downgrading due to incorrect ECD should be slight.

Reduction of investment aid
Before 1 January 2011, many device to aid the real estate investment existed. It will always be the case but after a grooming conducted by the government led to the elimination or reduction of certain assistance.

This is particularly true of the device Censi-Bouvard. The rate of tax exemption (deduction of mortgage interest) goes from 25 to 18% and its ceiling is lowered from 300 to 000 to 270 000 euros.

Decline in net Scellier
Before 1 January 2011, the Scellier permitted, without condition, a real estate investor to deduct the interest on the mortgage, under certain conditions. This system is considered too expensive compared to the results will change from 1 April 2011.

Both developments are scheduled for Scellier: an environmental approach and a reduction of interest rates considered. Thus the level of interest deduction for conventional dwellings from 25 to 13% after 1 April 2011. For housing consumption of low-skilled (BBC) the rate will increase from 25 to 22%.

Increased taxation of capital gains
Before 1 January 2011, to prevent real estate speculation, the tax rate on capital gains realized through the resale of a home away from home was 16% primary.

The government has decided that from 1 January 2011, this rate would increase to 19%. One way to increase state revenue but also to avoid a return to real estate speculation as was the case in Paris in 2010 (over 20% of the rise in house prices).

New interest-free loan
Before 1 January 2011, the interest-free loan was subject to special conditions including conditions of income for households wishing to buy and benefit from this device.

To encourage first-time buyers, the government has revised this scheme. This now allows new buyers had never owned to have a 0% loan, irrespective of income. The income will be taken into account only to define the terms of repayment.

To conclude these changes will impact greatly the housing market in 2011. The latter, already weakened by the return of inflation and economic growth remains lackluster, should have difficulty absorbing these new constraints. Housing prices could move back down.


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  5. The French property in 2011 is described here. Read to know m ore

    The Nautical Condos