In 2009, the device of the Scellier law came into force. This device allows real estate buyers to benefit from tax exemption for 9 years by buying a new property or under construction. This tax exemption is subject to fairly strict regulations. Thus, it is possible to wonder if the repurchase of real estate loans is a solution to be considered by buyers who have opted for this tax exemption. Are the Scellier law, the renegotiation of the interest rate and the consolidation of loans compatible devices?
The Scellier law: what is it?
Before answering the question of the compatibility of the three concepts, it is good to understand the very principle of the Scellier law . The Scellier investment allows a citizen, who pays less than € 8,334 in income tax per year, to acquire real estate without having to make a financial contribution . In fact, the investment is 100% financed by a financial body and, therefore, subject to an interest rate. The investor does not enjoy his property. He leases it. The amount of rent cannot exceed a certain amount. This commitment gives them another advantage: a tax reduction for 9 years . The tax exemption proposed by the French government is, therefore, a way of keeping a stable budget.
Renegotiation of the loan interest rate
Now let's understand the principle of renegotiating the interest rate on real estate. When the mortgage loan rate is declining, it is worth considering renegotiating your mortgage loans in order to benefit from a reduction in monthly repayment installments . This decrease improves the household cash flow and therefore an option not to be overlooked. Here, the financial institution renegotiates only the initial borrowing rate and modifies the terms of the initial loan. The initial loan is not closed and the borrower keeps the same financial institution .
The consolidation of mortgage loans: what is it?
Now let's take a look at the principle of consolidating mortgage loans. The repurchase of credits is a concept, quite different from renegotiation . Credit consolidation brings together all of the current credits in a single loan . The initial loan is settled. If the repurchase of credits does not take into account loans at zero rate or loans at 1%, nothing excludes the possibility of renegotiating his credit entering into the device of the Scellier law. Is it a good idea to use the consolidation of credits as part of a Scellier investment? If so, in what situation?
Is the Scellier law compatible with the repurchase of credits?
The device of the Scellier law has advantages, but also drawbacks. Indeed, the professional situation of the investor can evolve over the years just as it is possible that the real estate will not manage to find a tenant . In these cases, the mortgage under the Scellier device will become a burden with heavy burdens for the investor. It is to avoid financial difficulties that the consolidation of loan repurchases or renegotiation comes into play. It is also necessary that the repurchase of credits does not make you lose your tax advantages ! To keep your rights, you must respect two conditions:
- The new mortgage must replace the first loan.
- The amount of new interest must not be greater than the interest of the first loan .
The repurchase of credits as the renegotiation of the interest rate are not incompatible with the law Scellier. However, the situation must be carefully analyzed in order not to lose the tax advantages offered by the Scellier law.