WHAT IS THE ELP AND IS IT STILL INTERESTING TODAY ?


WHAT IS THE ELP AND IS IT STILL INTERESTING TODAY ?
WHAT IS THE ELP AND IS IT STILL INTERESTING TODAY ? 




A few years ago, the ELP or Housing Savings Plan was a good lever for financing a real estate project. Unfortunately, in recent years, the conditions of access to this savings plan have hardened while its yield tends to decline.

 Could this be the beginning of the end for this savings product?

SHORT DESCRIPTION FOR THOSE WHO DO NOT KNOW THE ELP


The Housing Savings Plan or ELP is an investment that extends for a minimum of four years. By choosing this plan, at the subscription, his owner agrees to pay a minimum sum of € 225 on his account. He must then feed it regularly. For this, he can make a payment every month, every three months or every semester.


The purpose of this plan is to take out a home savings loan. This plan allows an individual to obtain a mortgage at a preferred rate.


He can then use this credit to make the purchase of a principal residence.
Unfortunately, today, the ELP no longer seems to be very interesting.


In question, the conventional mortgage that is currently offered at rates really advantageous, sometimes under 1% for a loan of 15 years.


Since the tax reform of 1 January 2018, all interests in the ELP have been taxed. As a result, this plan has become less interesting than an A booklet. When calculating, the annual return of the ELP is only 0.70% per year.


However, it is necessary to differentiate between ELPs that were made before and those opened after 1 January 2018: ELPs opened before that date are exempt from income tax and are not eligible for social security contributions.


This is also the case for plans that are less than twelve years old.
For individuals who have opened an ELP since 1 January 2018, there must be a mandatory flat-rate charge on the interest that results from the ELP.

The levy is up to 12.8%. It is also necessary to provide social security contributions of 17.2%.


INVESTMENTS MORE INTERESTING THAN THE ELP


Today, other investments are more interesting than the ELP. Already, it should be noted that this plan has lost points in favour of the livret A.

The latter is becoming more interesting today especially with the new so-called flat tax. Life insurance is also more exciting than the ELP.

In any case, individuals are aware of the situation. Proof of this, in March 2018, deposits on ELPs recorded by the Bank of France are only 31 million euros when they were 1.3 billion two years ago.


If today the ELP loses notoriety, experts believe that it can still change if the rate of mortgages starts up again.


thanks for the time .

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