Tax credit cut in housing review
No more tax credits for buying property as government directs aid towards first-time buyers in bid to cut costs
TAX credits to help people into the housing market are to be slashed as the government bids to balance its books.
The tax reduction on mortgage interest was one of the first measures introduced by the Sarkozy government in 2007 but has been dumped as the cost has soared: from €249 million in 2008, it will cost €1.5bn this year.
Meanwhile, the zero per cent loan prêt à taux zero will become the only help available for buyers, and it is being restricted to first-time buyers of more modest means.
Details have not yet been revealed but the new-style PTZ is expected to cost €2.6billion as against a predicted total €4.4bn for the previous measures.
The old PTZ gave a loan of up to €45,000 in new property and €32,500 in old property. However, the repayment period will be cut for better-off families – those making more than twice the Smic of €1,344 a month – making it less attractive
It will be set on the geographical area, the size of the household, whether it is a new-build or not and its eco energy-rating.
Tax credits, one of the first moves by the new Sarkozy government in 2007 will be dumped next year because it has cost too much and is being used by the people who are already property-owners.
The Scellier reduction of 25 per cent on properties for rent will be reduced. At the moment it has a €300,000 ceiling over nine years and this will be cut to 22.5 per cent for low-energy consumption homes and 13.5 per cent for the rest.
