Exemption from notary fees, opening of the PTZ to all first-time buyers… Political parties are trying to seduce voters by banking, in particular, on the real estate purchasing power of first-time buyers.
The real estate crisis is no longer in doubt. In their latest note, the notaries announced that the volume of sales of old housing, cumulatively over the last twelve months, had reached 835,000 transactions at the end of February. This represented a year-on-year decline of 23%. “The French real estate market had never experienced such a sharp drop over one year and we have to go back to November 2016 to find such low transaction volumes,” the notaries then specified.
The fault is obviously the drastic drop in real estate purchasing power. In 2023, this fell by 6m² over one year, again according to notaries. A study by the broker Meilleurtaux from the start of the year specifies that the surge in property loan rates in 2023 largely explains this decline. We are went from a rate of 1% on average in 2022 to more than 4% since this fall. Mechanically, we repay much more interest to the bank and borrowing capacity declines. Thus, with a rate of 4.2%, we can only borrow 162,000 euros over 20 years with a monthly payment of 1,000 euros per month. This is 55,000 euros less than when rates were at 1% (the borrowing capacity was then close to 217,000 euros).
Unsurprisingly, first-time buyers are particularly affected by this crisis. And the political parties have understood this well. The decline in purchasing power being the crux of this campaign, the parties have therefore decided to seduce this young electorate by boosting their real estate purchasing power. Here is an overview of the main proposals known for the upcoming legislative elections from the three main political movements.
• New Popular Front: a broader PTZ
The New Popular Front promises “the opening of the zero-interest loan to all first-time buyer households without geographical distinction or between new or old”.
In 2024, the government has in fact greatly tightened access to PTZ. For example, it is no longer possible to buy a new house. This aid is only available for purchases in collective housing (in other words for apartments) and only in stressed areas (A bis, A and B1). In the old one, there was no change in 2024: only purchases in relaxed zones (B2 and C) give access to a PTZ. And it is always necessary to carry out renovation work representing 25% of the total cost of the operation to be financed.
But not everyone can have access to a PTZ. Certain income ceilings must not be exceeded, which depend on the composition of the household and the geographical area. The New Popular Front did not give details on a possible evolution of these ceilings.
There is currently no cost estimate for this proposal.
• National gathering: a PTZ which partly turns into a donation
For its part, the National Rally offers a zero-interest loan of 100,000 euros for young couples who become property owners. Loan which would partially transform into a donation from the 3rd child.
Households under 35 could thus only repay 40% of this loan from the third child. Estimated in 2022 at 12.6 billion euros by the Montaigne Institute (due to the rapid increase in state debt), this measure could in fact be much more costly with the sharp rise in rates since 2022, as we explained here.
• Renaissance: exemption from notary fees
The presidential camp would like to exempt first-time middle-class buyers from notary fees. “For middle-class French people who wish to own property for the first time, we will waive notary fees when purchasing housing up to 250,000 euros,” he explains.
This weekend, the Prime Minister gave some details to the Parisian. The amount of 250,000 euros here refers to the value of the property (and not the notary fees).
However, what we call in common parlance “notary fees” include notary fees but also taxes, transfer taxes for valuable consideration (DMTO), which finance the State and local authorities. . The Renaissance party did not specify whether the proposed exemption would only concern notaries’ emoluments or emoluments as well as associated taxes.
There is currently no cost estimate for this proposal. DMTOs represented 16.8 billion euros in tax revenue in 2022, according to the 2022 housing account report published last September.