August 2015 – French Mortgage Transaction of the Month

This month’s transaction of the month is on a large villa in the South of France. With a loan value of €3m and a property price of €5m, the client put down a reasonably sized deposit at 40%.

On the sum of €3m we managed to source the client a 10-year repayment loan at a rate of 2.85%, a good level for such a large loan on a shorter than normal repayment period.

The client bought the property using and SCI (Société Civile Immobilière). An SCI is essentially a private, limited and fully incorporated company with a registered office in France. This ‘office’ can be the property itself and then shares of the SCI then own the property in question.

There are many advantages of owning a French property through an SCI, including taxation benefits. Yet perhaps one of the most commonly appreciated advantages is that, being a company, the shares of the SCI are owned by its shareholders, in many cases, family members. This means that throughout the course of a buyer’s life they can bequeath shares to members of the family in a tax-efficient manner.

For further information on buying French property through an SCI or French mortgage in general, please get in touch with us.