a revolution for home ownership throughout France

The government has taken an important step to encourage homeownership by proposing a temporary extension of the zero-rate loan (PTZ) for new properties throughout the country.

This measure, integrated into an amendment to the finance bill (PLF) for 2025, is part of a context of crisis housing and major slowdown in real estate construction. The announcement also responds to a promise made by the Prime Minister, Michel Barnier, during his general policy speech.

Borrowing rates noted on 11/26/2024

A temporary measure to support first-time buyers

Until now, the PTZ for the purchase of new housing was limited to so-called “tense” areas, where demand greatly exceeds supply. In 2024, new houses were even excluded from this system. According to Les Echos, the government amendment now proposesextend the eligibility of the PTZ throughout the territory for new collective housing as well as individual houses. This temporary measure will be applicable to loan offers issued between February 1, 2025 and December 31, 2027.

The stated objective is twofold: to encourage household ownership, particularly first-time buyers with modest incomes, and to revitalize a new housing sector hit by a sharp drop in construction starts and sales. Valérie Létard, Minister of Housing, also confirmed before the Senate Economic Affairs Committee that the system for old housing in relaxed areas, subject to renovation conditions, would be maintained.

Quotas and financing: a balance to find

The PTZ system is based on a system of quotas, that is to say the part of the total cost of the project financed by this interest-free loan. These quotas, which currently vary from 20% to 50% depending on household incomecould be revised as part of this extension. The amendment indicates that a decree will specify these new rates in order to “support the accession of low-income households” while controlling public spending.

Professionals in the sector, although generally in favor of this measure, warn of the risks linked to a possible reduction in quotas or modifications to repayment deferrals, which could reduce the attractiveness of the device. These adjustments will be crucial to ensure that the PTZ remains an effective tool for supporting property ownership and boosting new real estate.

Towards broader housing reform

This extension of the PTZ is accompanied by other measures under discussion. Minister Valérie Létard spoke of parliamentary initiatives aimed at tax exemption on family donations to finance the purchase of new housing, a solution that she considers to be transitional. Moreover, reflection is underway to review the status of the private lessora project planned for 2025, which could restore a central role to rental investment in the French real estate stock.

Professionals in the sector, notably the Federation of Real Estate Developers, are calling for structural measures to restore investor confidence and sustainably support the market. At the same time, the government seems to want to act quickly to avoid a worsening of the crisis, as evidenced by its intention to extend the Pinel system in a lighter form until March 2025 for purchases signed before the end of the year.