The right structure starts with your project.

Personal contribution, sale of an asset and family support

Available savings or the proceeds of a sale can finance all or part of the project. Keep a reserve for fees, delays, maintenance and periods without rental income. A family loan remains a debt to be formalised, with a repayment schedule and applicable declarations; a gift is subject to other civil and tax rules. The origin of the funds and their availability must be documented before the transfer. Our comparison distinguishes money genuinely available from income still expected.

Source: Service Public · Declaration of loans between individuals

Borrowing in France and security over your assets

French financing may be considered if the bank expressly accepts the country, the use of the funds and the security. A mortgage on a property located in France may form part of the study, without making the loan automatic. An amortising loan repays the capital gradually; an interest-only (in fine) loan leaves it to be repaid at term. A bridging loan depends on a sale to be completed. Compare the total cost, the insurance, the term and the final repayment. In the event of default, the assets pledged as security are exposed.

Sources: Notaires de France · Buying and passing on property abroad · Service Public · The mortgage guarantee · Ministry of the Economy · Understanding property loans

Pledge and Lombard credit

Pledging an investment means giving it as security. Some institutions offer Lombard credit backed by financial assets, according to their criteria and the authorised practices. You retain market exposure while adding a debt. If the value of the assets falls, the bank may require additional security or sell assets under the contract. An interest-only (in fine) repayment requires a credible resource at term. We incorporate these risks into the comparison; the conditions are set by the lender.

Source: BoursoBank · How Lombard credit works and its risks

Local bank, developer payment schedule and vendor credit

A local loan depends in particular on the profile accepted, provable income, the currency and the eligible property. The country guides set out the documented options. A developer payment schedule or vendor credit, if offered, organise payments: they guarantee neither delivery nor the refinancing of the balance. Have the penalties, security, termination conditions and effective protections verified. An off-plan purchase abroad does not automatically benefit from the French VEFA protections.

Source: Notaires de France · Buying and passing on property abroad

Buying directly or jointly

Personal ownership may suit a straightforward purchase, provided local law allows it. When buying jointly, you must organise the shares, the expenses, personal use, decisions and the exit of a co-investor. Joint ownership (indivision), usage rights or split ownership (démembrement) must be examined according to the law of the country: French mechanisms do not transpose automatically. A family acquisition also requires an analysis of the matrimonial regime and succession. The term of a lease must remain visible in any projection.

Source: Notaires de France · Buying and passing on property abroad

Dedicated company, local company and holding company

A company can serve to organise a business or several partners. A French SAS or SARL, a local company or a holding company are not interchangeable solutions. You must examine the ability to hold the local right, the authorised activity, governance, accounting, costs and the exit of funds. Share capital and a partner’s current-account advance have different effects; the latter must be documented. French rules are not sufficient to validate a cross-border loan to a subsidiary. A holding company does not eliminate tax.

Sources: Service Public Entreprendre · Choosing a legal form · Service Public Entreprendre · Partner’s current account · DGFiP · International tax treaties

Your existing SCI: start with a diagnosis

Before considering an SCI, let us clarify its tax regime (IR or IS), its articles, its current assets, its debts and the origin of its cash. A furnished-rental activity may make it subject to corporation tax (IS); its civil character should not be presumed compatible with a tourist operation. Recognition of the company and of the right acquired abroad remains to be verified. A family SCI and an SCPI, a managed collective investment, serve different objectives. Buying through an SCI is therefore not our default answer.

Sources: DGFiP · Société civile immobilière · BOFiP · Furnished rental by a société civile

Taxation: reasoning on real flows

For a French tax resident, foreign property income may have to be declared in France, even if it has already been taxed locally. The applicable treaty determines how double taxation is handled: tax credit or exemption with possible account taken for the rate. Rents, dividends, interest and capital gains do not necessarily follow the same regime. The calculation must distinguish the company, the partner and the nature of the income; a low local rate is not sufficient to establish your final taxation.

Sources: DGFiP · Taxation of foreign-source income · DGFiP · International tax treaties

Anticipating currency exchange, resale and transmission

Our method consists of testing a fall in income, a rise in charges and an unfavourable exchange rate, then checking the cash reserve. Resale also requires an assumption on timing, costs and tax treatment. Foreign property may fall within the IFI base of a French resident, subject to the applicable rules and treaties. The rights to be passed on, the succession and the consequences of a change of residence must be prepared with a notary and a tax adviser.

Sources: DGFiP · Persons liable to IFI · Notaires de France · Buying and passing on property abroad

Our support, step by step

With Jonathan Lombi, the first conversation clarifies the destination, use, time horizon, budget, deposit and ownership situation. We match the developments to these criteria, enter the assumptions into the simulator and prepare a list of documents and questions. You can then put the options to your bank, an independent local lawyer and your French tax adviser. We help keep track of the development information; the relevant professionals validate the deeds, the taxation and the financing. The scope of our involvement and the applicable fees are specified before any commitment.