The old PTZ
If you've recently fallen under the spell of an old home, but are worried that your finances won't follow suit, this article is for you. Today, it is possible to benefit from a zero rate loan (PTZ) to buy old property with work - we speak of old PTZ. A few clarifications ...
Appearance of the old PTZ
The zero rate loan was initially granted for the acquisition of a new main residence. Article 59 of the 2015 finance law has extended its scope since it is now possible to contract an old PTZ, intended for the purchase of old housing to be rehabilitated in rural areas.
Initially, the old PTZ only concerned 5,920 municipalities, but the 2016 finance law, in its article 107, made it possible to broaden its scope. From now on, the old PTZ makes it possible to buy old housing throughout France - the rural PTZ is over.
The old PTZ: a free loan
An old PTZ is a so-called zero-interest mortgage. Why ?
- There is no administration fee. As a general rule, in terms of real estate loan, the application fees are intended to remunerate the organization with which you contract your loan for the study and preparation of your file. They constitute on average 1% to 1.5% of the borrowed capital. The old PTZ being a regulated loan, you do not have to pay any administrative fees.
- Interest is payable by the State. Interest is the amount you have to pay to borrow money. They are expressed as a percentage (for example 4%: If we borrow 1000 € for one year, the amount of interest to be paid will amount to 44 €). With the old PTZ, it is the State which reimburses this interest.
Clearly, you will only repay the capital borrowed under your old PTZ.
The old PTZ also presents advantageous conditions: its total duration is 20, 22 or 25 years, knowing that there is a possibility of deferral period of 5 to 15 years during which the borrower does not pay any monthly payment.
The conditions to benefit from the old PTZ
To benefit from an old PTZ, several conditions common to all PTZs must be met:
- Not having owned their main residence during the past two years (first-time buyer condition) . There are exemptions, particularly if the borrower of the old PTZ, or another resident of the accommodation, meets certain conditions relating to disability or invalidity.
- Meet means-tested . The maximum resources must not exceed a certain amount to obtain an old PTZ. All this is nevertheless modulated according to family responsibilities and the area where the property you want to buy is located. The old PTZ is therefore a family loan which takes into account the composition of the household. For example, for a single person living alone, these resources must be between 37,000 and 24,000 €; for a couple with two children, the range goes from 74,000 to 48,000 €. Note that it is the reference tax income that is taken into account, as well as that of the other people who will occupy the accommodation, for the year n-2 preceding the offer (i.e. (a PTZ offer made in 2016 will take into account the 2014 income indicated on the 2015 tax notice).
- The housing acquired thanks to the old PTZ must become the principal residence of the borrower at the latest 1 year after the end of the work or the purchase of the housing . It is also forbidden to rent it for 6 years following the payment of the loan. However, all these conditions can be relaxed in certain cases, in particular for reasons of professional mobility, invalidity or change in family situation. Important note: it is possible to request the transfer of an old PTZ if you wish to sell the accommodation to buy a new one.
- The old PTZ is only a complementary loan: it is used to finance only part of the purchase of housing . Therefore, it will be necessary to supplement it with one or more other loans, or even with a personal contribution. To determine the amount of the old PTZ, a percentage is applied to the total cost of the operation. This cost is nevertheless capped according to the number of occupants and the area of the building; similarly, the amount of the former maximum PTZ is capped at 40% of the total cost of the operation.
- Finally, the building to be acquired must meet certain characteristics . Indeed, an old PTZ can only be used to finance:
- The purchase of old housing with major works or whose works represent at least 25% of the total cost of the operation;
- Or finance part of the purchase of old social housing.
Who to ask for the old PTZ? The request for a former PTZ is made directly with a credit institution that has signed an agreement with the State (which concerns almost all banks). This organization will then make an assessment of the borrower's situation (repayment guarantees, solvency); but he remains, as with any loan, free not to grant an old PTZ. He may also require the purchase of death and disability insurance.
The old PTZ for the purchase and rehabilitation of a building
The old PTZ allows first of all to acquire old housing that you want to renovate. The work program must then represent at least 25% of the total operation - that is to say at least one third of the purchase value of the home alone.
Please note, the work carried out must be improvement work to benefit from the old PTZ. They concern either the creation of living space, or the modernization of housing, or sanitation or development of living space, or finally work intended to achieve energy savings or upgrading to standards.
Being a condition of obtaining the old PTZ, it is necessary, in this case, to provide the lender with:
- A sworn statement
- And quotes for the work.
Note that the work must not have already started before obtaining the old PTZ and the borrower's certificate obliges him to carry it out within 3 years. After their completion, it will be asked to justify that these improvement works comply with the conditions previously indicated by means of invoices.
For the rest (amount granted, repayment terms), the old PTZ regime is identical to the general PTZ regime in new buildings.
Finally, let us remember that the finance law for 2016 made it possible to extend the old PTZ throughout France: in short, it is no longer necessary that the accommodation that one wishes to acquire is located in a particular geographical area.
The old PTZ for the purchase of old housing from the HLM park
Still under conditions of resources, an old PTZ can finance part of the purchase of social housing by the social landlord. The occupant or the caretaker of the building employed by the seller may benefit.
In this case, the price of the accommodation must be less than or equal to the assessment made by the service. It must also become the principal residence of the borrower in the year following the acquisition or the end of the work. The amount of the old PTZ then corresponds to 10% of the total cost of the operation, for a period that may extend from 20 to 25 years (with, once again, a possibility of deferred repayment).
The success of the old PTZ
While many feared that the old PTZ would attract few people, it was very successful. The finance law for 2016 allowed a real boom by offering the possibility of benefiting from the old PTZ throughout the United States: it represented 1 / 5th of the zero-interest loans distributed for the first half of 2016 while it did not even represent not 1 / 20th in 2015.
Moreover, this law is generally more flexible since:
- It increased the maximum amount of old (and new) PTZ to 40%, down from 18 to 26% previously.
- In addition, more households now have access to the old PTZ since the income ceilings taken into account have been significantly increased.
- The repayment terms have been adapted: A deferred repayment period of 5, 10 or 15 years (depending on income) can be granted and the loan period is 20 years minimum in order to reduce the cost of the loan on household finances .
All these reductions have clearly borne fruit, the old PTZ, and its corollaries, now making it possible to keep the French real estate sector in good shape.
In short, the old PTZ is a loan:
- Simple and important : The websites and the various online simulators make it possible to understand in a few clicks the conditions of the old PTZ and its amount in advance. Moreover, the amount granted can be large, a considerable advantage given the zero interest rate.
- Social and family : The resources and composition of the borrower's household are taken into account to calculate the repayment terms;
- Current : It takes into account the prices of the real estate market according to the geographical area where the property is located for which one wishes to benefit from the old PTZ. In addition, since it requires major improvement work to be carried out, it helps to guarantee the good ecological health of the dwelling.