What is the Compte épargne logement (CEL) in France?
The Compte épargne logement (CEL) is a regulated savings product in France which allows you to potentially obtain a mortgage at preferential rates after at least 18 months. The loan can be used to finance property purchases, construction or renovation work. You can use this account to save for your primary residence, a mixed-usage commercial and residential property and shares in certain property investments (SCPI). This blog is based on the rules in 2023 and for accounts opened since 2018.
Where can you open a CEL?
You can open one with most banks in France. You can also have a Plan épargne logement (PEL), but if you wish to do so then you must have both types of account with the same bank. Each person can only have one CEL.
What is the minimum investment amount?
In 2023, it is 300 euros to open an account. You can make further contributions of at least 75 euros per contribution. Regular contributions are not mandatory.
What is the maximum investment amount?
In 2023, the maximum amount that you can invest into a CEL is 15,300 euros.
Can I withdraw my funds?
Yes, at any time, but the account balance must be at least 300 euros after the withdrawal, otherwise the account will be closed.
What is the interest rate for savings for accounts opened in 2023?
The interest rate is currently 2% compound.
What is the tax treatment of the interest?
Interest is taxed at 30% (12.8% income tax and 17.2% social charges) but you can opt for your marginal tax rate if you wish. The purpose of the CEL is to obtain a mortgage at a lower interest rate, not for the tax treatment of the interest on savings.
What is the prêt épargne logement?
It is a mortgage at usually preferential interest-rates and qualifying for this is the main point of a CEL account. If you opened your account after March 2011 then the notable points are as follows:
- The maximum loan amount is 23,000 euros but this can be combined with other loans for more expensive projects. You can combine your rights to a compte épargne logement (CEL) loan with a Plan épargne logement (PEL) loan, but if you do so then the total amount of the subsidised loan, the prêt épargne logement, will be limited to 92,000 euros. The maximum amount that you are eligible for depends upon how many “droits à prêt” (loan rights) that you have acquired, which is based on the amount of interest that your account has earned. The minimum amounts of interest that grant rights are as follows:
- Purchase or construction of a property: 75 euros
- Renovation or repair works: 37 euros
- Energy saving renovations: 22.50 euros
- You can give your loan rights to a family member as long as your family member has had a CEL account for 18 months. This period can be reduced to 12 months if the account that is making the donation has been open for at least 18 months.
- The interest rate for accounts opened in 2023 is 3.5% variable. Note that in October 2023, interest rates are about 4% for non-CEL 15-year fixed-rate mortgages.
- The maximum term of a prêt épargne logement is 15 years, compared to 25 years for most French property purchases. However, you can combine this loan with a traditional mortgage from the same bank.
- You do not have to obtain your mortgage or loan from the same bank that holds your CEL.
- It is possible to pay off your CEL loan early.
Useful French links
- https://www.service-public.fr/particuliers/vosdroits/F16136
- https://www.service-public.fr/particuliers/vosdroits/F16139
- https://www.service-public.fr/particuliers/vosdroits/F33923
- https://www.lafinancepourtous.com/pratique/credit/credit-immobilier/le-pret-du-pel-et-du-cel/
The views expressed in this article are not to be construed as personal advice. Therefore, you should contact a qualified, and ideally, regulated adviser in order to obtain up-to-date personal advice with regard to your own personal circumstances. Consequently, if you do not, then you are acting under your own authority and deemed “execution only”. Additionally, the author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Importantly, this article is dated and is based on legislation as of the date. It should be noted that legislation changes, but articles are rarely updated. Sometimes a new article is written; so, please check for later articles. Additionally, check for changes in legislation on official government websites. Finally, this article should not be relied on in isolation.
