ax Benefits for First-Time Home Buyers
To make homeownership more accessible, the government has implemented a range of tax benefits specifically for first-time home buyers.
What is a First-Time Home Buyer?
A first-time home buyer, or primo-accédant, is anyone purchasing a home for the first time, or someone who hasn’t owned a property in the two years preceding their purchase (such as a former homeowner who has since been renting).
What Financial Assistance is Available for First-Time Home Buyers?
To help finance a first home purchase, first-time buyers may benefit from a zero-interest loan (PTZ), available under income limits, and a reduced VAT rate of 5.5% in urban development and renovation zones (for new properties).
First-Time Buyer: New or Existing Property, Which to Choose?
As a first-time buyer, choosing between a new or existing property mainly depends on your personal situation. Each option has its benefits, such as:
- For new property: Optimal living quality in a building that meets the latest standards in insulation, equipment, etc. The 2012 Thermal Regulation (RT 2012) also ensures lower energy consumption compared to older properties.
- For existing property: Generally, a lower purchase price compared to new properties. However, be aware that while older homes may cost less initially, they may require compliance upgrades (especially electrical) and improvements (such as kitchens, bathrooms, etc.).
Financing Options for First-Time Buyers
To make homeownership more accessible, there are several financing options available. Here are the three main solutions for first-time buyers:
- The Zero-Interest Loan (PTZ),
- The Social Homeownership Loan (PAS),
- The Action Housing Loan (1% Housing Loan).
The Zero-Interest Loan (PTZ)
The PTZ is a financing solution for first-time buyers designed to help finance the purchase or construction of a primary residence. This loan provides an interest-free advance. However, it’s granted based on income limits for individuals or households, with the amount and repayment period depending on this criterion. The PTZ typically does not cover the full cost of a property purchase but can be combined with other home loans (such as the PAS or traditional bank loans).
The Social Homeownership Loan (PAS)
The PAS is a home loan intended for low-income households looking to become homeowners, specifically first-time buyers who meet eligibility criteria. Like the PTZ, PAS loans are subject to income limits. Repayment rates depend on the loan term and the bank issuing the loan. Repayment terms can range from 5 to 35 years, with minimum fixed and variable interest rates as follows:
- 2.65% fixed or variable for terms up to 12 years,
- 2.85% fixed and 2.65% variable for terms between 12 and 15 years,
- 3% fixed and 2.65% variable for terms between 15 and 20 years,
- 3.10% fixed and 2.65% variable for terms over 20 years.
This loan can be combined with the PTZ, savings plans, or the Action Housing Loan.
The Action Housing Loan
Known as the 1% Housing Loan, this program assists first-time buyers by providing financing for a primary residence. It’s typically offered to employees of private-sector companies affiliated with the Interprofessional Housing Committee (CIL). The property must meet environmental standards, and the loan is limited to first-time buyers.
The loan term is a maximum of 20 years, and the loan amount must not exceed 30% of the total cost of the property. Depending on the area, the loan amount may range from €7,000 to a maximum of €25,000. This loan is not tied to employment, so an employee can leave the company after applying without being required to repay the loan early.
In addition to these three primary options, first-time buyers may also qualify for local government assistance and reduced VAT at 7%.