PEL - savings account giving the right to a loan with a fixed rate

PEL is a savings plan for the purchase of your primary residence or to finance renovation or expansion work. You can also spend the funds for the same purposes for your parents or children. This plan is only for individuals, both adults and children.

PEL validity period

This savings account is opened for a minimum period of 4 years and a maximum period of 10 years. At the end of the contract, it is impossible to replenish it, while savings continue to be capitalized for 5 years.

PEL opened from 03/01/2011 after 5 years becomes a regular deposit, provided that funds have not been withdrawn from it.

The maximum savings ceiling is €61,200 (excluding accumulated interest).

The return on savings is 1% for accounts opened from 08/01/2016.

Credit rights

For accounts opened from 03/01/2011, 5 years after opening, you must take out a loan, otherwise the account becomes a regular deposit. PEL entitles you to a real estate loan:

• with a maximum amount of 92 thousand/€,
• for a period from 2 to 15 years,
• for accounts opened from 08/01/2016, the loan rate is fixed at 2.2%.

Closing PEL

The plan must be liquidated in full; it is not possible to withdraw any of the funds. Closing is possible at any time. If closing occurs less than 3 years from the down payment, the rights to the loan and to receive the premium are lost.

Taxation

Profits from PELs opened since 2018 are taxed at PFNL 12.8%.

• An exemption from the mandatory fixed deduction is possible for taxpayers whose N-2 taxable income was less than 25K€ for a single person or 50K€ for a couple subject to joint taxation.
• At the taxpayer's irrevocable option, interest may be taxed at the progressive IR tax rate. This option applies to all income and PV, which are subject to the same taxation; this is done every year when declaring income.

Profits from PEL opened from 01.03.2011 are subject to social contributions of 17.2%.

Inheritance

After the death of the account holder, the funds in the PEL are usually blocked and go to the estate.

The special thing about transferring PEL is that it can be transferred by will. In case the account valid with automatic replenishment, then the heir, with the consent of other heirs, can continue the PEL, on the terms that were signed by the testator with the bank. If the heir already owns PEL, he can freeze it.