Lender's lien (IPPD)
A security close to a mortgage but reserved for the purchase of an existing property and exempt from land-registration tax, which makes it cheaper. It grants the bank priority ranking over the sale price in a seizure. Since 2022 it takes the form of a special legal mortgage.
Key points
- Reserved for the purchase of an existing property (not off-plan), it ranks on the sale price.
- Exempt from land-registration tax, it costs less than a traditional mortgage.
- Since the 2022 reform, it takes the form of a special legal mortgage for money lenders.
- It disappears automatically when the loan is extinguished, without a formal release in most cases.
Frequently asked questions
Why is the IPPD cheaper than a conventional mortgage?
A conventional mortgage is subject to land-registration tax (around 0.715% of the secured amount), which is the main component of its cost. The IPPD, financing a property whose funds directly serve to acquire ownership, benefits from an exemption from this tax because it is recorded within the land publicity of the transaction itself. This saving can represent several thousand euros on a large loan.
What is the difference between the IPPD and a surety guarantee?
The IPPD is a real security registered on the property: the bank has a direct right over the building in the event of default. A surety is a personal security: a third-party body commits to pay if the borrower does not. A surety requires no notary and is generally less expensive in direct costs; in return, file acceptance depends on the guarantor body's agreement.
Can the IPPD be used to finance works on the purchased property?
No, the IPPD can only secure the portion of the loan corresponding to the acquisition price of the existing property. If the financing includes works, the bank will use a conventional mortgage for the works tranche and an IPPD for the acquisition tranche, or a single mortgage covering everything. The broker ensures the notary correctly allocates the securities.
In practice
On a €320,000 purchase fully financed by a loan, the broker opts for an IPPD rather than a conventional mortgage: the land-registration tax saving is around €2,300, directly reducing the ancillary costs included in the APRC.
Official sources
- The special legal mortgage of the lender of money · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr
- Housing and financing information · ANIL