Everything you need to know about sensitive urban zones

The outdated concept of the sensitive urban zone

Sensitive urban zone: definition

A sensitive urban zone was an area classified as a priority by the State because of the problems endured by residents and users. These could be social, economic or security issues. For example, high unemployment. The PRV law(pacte de relance de la ville) defined ZUS as areas "characterized by the presence of large housing estates or run-down housing districts, and by a marked imbalance between housing and employment". They were qualified by a joint analysis carried out by local authorities and the State.

The concept of ZUS was introduced in 1996 as part of the development of urban policy. Sensitive urban zones were suburban areas receiving special attention from public authorities. Local economic and social considerations were taken into particular consideration in the deployment of appropriate solutions.

Sensitive urban areas were defined by decree and consisted of two elements:

• Urban regeneration zones (ZRU)
• Urban tax-free zones(ZFU)

ZRU and ZFU benefited from specific public aid in the form ofsocial and tax exemptions to encourage companies to set up there.

Urban regeneration zones (ZRU)

Urban regeneration zones were characterized by high unemployment, a high proportion of unqualified people and low fiscal potential. ZRUs were defined by the following criteria:

• Population weight
• Proportion of young people
• Unemployment rate
• Proportion of non-graduates

Urban tax-free zones (ZFU)

Zones franches urbaines were ZRUs with a population of over 8,500. They needed greater assistance to attract businesses. That's why we call them free zones. A zone franche is defined as a geographical area benefiting from tax incentives to encourage investment and the development of economic activity.

Disappearance of ZUS in favor of QPV

Priority districts of the city policy

The programming law for cities and urban cohesion (2014) redefined intervention perimeters with a view to offering administrative simplification and directing financial resources towards priority neighborhoods. Since 2015, the ZUS and their declinations (ZRU and ZFU) have been replaced by the city policy priority neighborhoods (QPV).

The list of priority urban districts is now based on a single criterion: per capita income. For the first time, the Lamy law uses a single poverty criterion to define the new geography of priority neighborhoods. This change in methodology should take greater account of socio-economic realities.

The new QPV geographical area

The new QPV geographic zone came into effect on January 1, 2024. It introduces the following changes:

• 960 neighbourhoods remain in the scheme and have a changing perimeter;
• 111 new districts join the scheme;
• 40 neighborhoods leave the QPV scheme.

Outgoing neighborhoods can benefit from support under a city contract issued by the prefect.

Benefits for companies setting up in QPVs

Exemption from business property tax (CFE)

Communes and public establishments for inter-communal cooperation (EPCI) can decide to exempt companies and micro-businessessetting up in QPVs from business property tax (cotisation foncière des entreprises ), beyond the first year of general exemption.

This exemption can also be applied to business extensions. This involves an increase in the means of production of an existing business operating in a QPV.

The CFE exemption conditions for companies are as follows:

• Created on or after January 1, 2016;
• Have a city contract in place on January 1 of the tax year;
• The establishment must have fewer than 150 employees;
• The establishment must be part of a company with fewer than 250 employees, annual sales excluding tax of over €50 million, etc.

L'CFE exemption for five years. A degressive allowance applies after that:

• In the sixth year: 60%.
• the seventh year: 40%.
• the eighth year: 20%.

This exemption may not exceed 32,468 euros in 2024.

Exemption from property tax on built-up properties (TFPB)

Businesses owning a building in a priority urban district can benefit from an exemption from property tax on built-up properties (TFPB). The aim is to encourage the establishment and maintenance of local businesses. The exemption lasts for five years.

Since 2015, sensitive urban zones have disappeared in favor of a simplification of administrative procedures with the emergence of priority neighborhoods for city policy (QPV), taking greater account of the precarious conditions of the populations in these urban areas when allocating tax exemptions to companies wishing to set up there.