Becoming an owner is the dream of many households in France. Whether to buy or invest, it is an operation that requires preparation, time and above all money. In Montpellier, as in the rest of France, the most common solution for financing your real estate project is to take out a loan from the bank. Fortunately, there are several devices, particularly in new real estate allowing households to be financially assisted. Overview of aid for the purchase of new real estate in Montpellier.
Purchase aid to finance your main residence in Montpellier
The city of Montpellier is mainly known for its mild climate and its beautiful Mediterranean beaches. Although it welcomes thousands of tourists each year in high season, this town of 280,000 inhabitants is no less attractive for living there 365 days a year. Every month, it even gains 300 new inhabitants of Montpellier and is one of the most dynamic cities in terms of demographics.
With a real estate market in full swing, Montpellier offers a wide range of new real estate programs in the city center, in outlying districts and in the municipalities of the metropolis. There is something for all types of homes and housing types. To help people from Montpellier settle down and buy property, the State and the city have put in place financial aid schemes to finance their main residence.
The Zero Rate Loan (PTZ)
The acronym PTZ stands for Zero Rate Loan. This is financial assistance, in the form of a loan allowing first-time buyers with low incomes to finance part of their main residence at an interest rate of 0%. Calculated according to the composition of the household and annual financial resources, the amount of aid can reach 40% of the price of the property depending on the area in which the accommodation is located. Montpellier is subject to zone A for its intramural districts, first ring cities and B1 for the rest of the municipalities of the metropolis.
Set up by the State, only contracted banks have the right to offer the PTZ to customers who meet the eligibility conditions. In addition, there are no application fees to pay. Namely that it is not possible to rent out your accommodation for 6 years following the date of the loan payment. Since its creation in 1995, many households in Montpellier have been able to benefit from it and become owners of their homes. .
The PTZ comes in addition to a traditional loan. It is therefore perfectly combinable with a personal contribution and even with certain local aid that communities can offer.
Montpellier helps its households to access property
The city of Montpellier set up a few years ago, a device of assisted accession for the first-time buyers wishing to buy in the nine. It is aimed at those “whose resources do not allow or make it difficult to acquire new housing in the private sector”. Assisted home ownership allows a buyer to acquire a new home below market price. That is an average price per m² of between 2,400 euros and 3,000 euros of living space with parking and excluding legal fees.
It should be noted that only dwellings built in ZACs are concerned by the system and that they are built by local promoters who have signed an agreement with the ANRU. Candidates for assisted access from the city of Montpellier must meet 4 conditions:
- Be a natural person
- Be a first-time buyer or not have owned their main residence for 2 years
- Occupy the accommodation for a period of 5 to 7 days as a main residence without the possibility of resale during this period
- Comply with resource limits
| Housing composition | Ceilings of household income in assisted home ownership | Income ceilings in intermediate home ownership |
|---|---|---|
| 1 person | €23,688 | €30,795 |
| 2 persons | €31,588 | €41,065 |
| 3 people | €36,538 | €47,500 |
| 4 people | €40,488 | €52,635 |
| 5 people or more | €44,425 | €57,753 |
Devices for investing in new real estate in Montpellier
If Montpellier is attractive for households seeking to acquire their main residence, it is just as attractive for investors looking for rental profitability. On many points, the city of Montpellier is particularly interesting for a rental project. The economy is dynamic there and it is the fifth student city in France with more than 82,000 students.
To encourage investors to invest their money in this magnificent city that is nicknamed the Gifted, the executive has put in place several measures to support new local real estate. In return, investors benefit from tax advantages. Discovery.
Tax exemption up to €63,000 over 12 years
The best-known rental investment scheme in new real estate is the Pinel law. It gives investors the opportunity to reduce their taxes in exchange for renting a new apartment for a defined period (6, 9 or 12 years). The amount of the tax exemption is calculated according to the price of the property and the duration of the chosen commitment.
- 12%, i.e. €36,000 for a rental period of 6 years.
- 18%, i.e. €54,000 for a rental period of 9 years
- 21%, i.e. €63,000 for a rental period of 12 years
The Pinel law was created with the aim of facilitating access to the private rental market for low-income households. Thus, both owner and tenant are subject to obligations. The owner or lessor must apply a rent not exceeding the scale fixed by law. The rent ceiling is €10.51/m² for zone B1 and €13.04/m² in zone A.
In the same way, candidates for renting accommodation must respect the ceiling of resources set according to the zoning as well. For example, a couple whose income exceeds €57,146 per year will not be able to rent Pinel accommodation.
Investing to rent furnished accommodation: LMNP status
On average, furnished apartments rent 10 to 30% more than unfurnished accommodation. This is particularly due to the fact that the services offered are much higher and that the tenant does not have to spend money to buy the supplies himself.
From a tax point of view, the status of Non-Professional Furnished Renter (LMNP) allows you to benefit from either a flat-rate allowance of 50% on rental income, which is called the micro-BIC regime. Either to deduct the expenses related to the acquisition and management of the property, this is the real regime. Namely that as soon as the rental income exceeds the sum of €72,600/year, the actual regime applies. Below, the investor has the choice between the one he prefers or that he considers the most advantageous in relation to his situation.
It must be rented for residential use and furnished with a range of supplies required by law: bedding, household products, crockery, storage, lighting, furniture and the minimum for cooking.
The Censi-Bouvard Amendment
As a student city, Montpellier is taken by storm from the month of June by a horde of students looking for accommodation for their university year. While many turn to bare rental, others prefer to rent in student residences and take advantage of a whole range of services included in the price of the monthly rent.
From an investment point of view, service residences (seniors, EPHAD, students and business) are a very good way to build up a real estate portfolio while receiving rental income. The Censi-Bouvard depends on the LMNP status and allows up to 11% of the purchase price to be tax exempt over 9 years, within the limit of an investment of €300,000 and to recover VAT.
The tax advantages of new real estate
Reduced notary fees
Paying notary fees is mandatory when buying new or old. Generally paid by the purchaser, the amount is not identical depending on the two types of purchase.
To calculate notary fees, you must take into account the value of the property and its geographical location. In the old these costs amount to around 7 to 8% of the price and in the new between 2.5 and 3%. This advantage is exclusively reserved for new real estate.
Exemption from property tax
The property tax applies to any owner of a dwelling on January 1st. By buying or investing in new real estate, you can be totally or partially exempt for 2 years.
Attention, the municipality reserves the right to refuse the exemption. In Montpellier, the former mayor of the city Philippe Saurel ended the 2-year exemption on built land. Second homes are also taxed at 20%.
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