Mortgage or no mortgage

[NuBeginnings]

This the question.

If you had 1.5million Euros to buy a house in France and live mortgage free, what would you do. No option to spend less.

Interested to see the various ideas.

[Chancer]

I am not sure what sort of ideas you are looking for especially when you say "no option to spend less"

I could buy 30 houses around here for that money.

You might be able to live mortgage free in a 1.5 million Euro house but the taxes foncieres and habitation would be far more each year than most peoples mortgages.

You ask what would you do? And say you are interested in the various ideas, call me uimaginative if you wish but arent there only two answers (no option to spend less) - I would do it! or I would not do it!

What am I missing?

[pachapapa]

365 YOURTES plus an extra one for leap years and save on TDH and TF.

[LEO]

[quote user="NuBeginnings"]This the question.

If you had 1.5million Euros to buy a house in France and live mortgage free, what would you do. No option to spend less.

Interested to see the various ideas.[/quote]

" If "

If your Aunt had balls , would she be your Uncle ?

[Nearly Retired (I am now)]

"If you had 1.5million Euros to buy a house in France and live mortgage free, what would you do. No option to spend less."

Don't know ! May I very respectfully say - daft and incomplete question.

[NuBeginnings]

The question is not daft, the question was intended to see peoples perspective and to invoke thought.

Chancer you got it in one.

You might be able to live mortgage free in a 1.5 million Euro house but the taxes foncieres and habitation would be far more each year than most peoples mortgages.

So now the question is how to buy your dream home and save paying the wealth tax?,

[andyh4]

Wait for the announcement regarding its repeal in February

 

Is this 20 questions?

[Chancer]

The question now is where do I get the €1.5 million to play your game seriously [:D]

I have a strange feeling that you may have already worked out the answer to your question given the investment you have made in your property.

Actually the reform of the ISF may really work out well for you.

[Babbles]

As said the running cost of a house 1.5 million would huge, not that it would by a chateau round here so I would probably a small property in an exclusive area, but would still need an income so that wouldn't really work so its back to having a property that creates an income and we do that already! But what it would enable us to do as we'd be mortgage free would be to sell our business interest in the UK and spend more time together

[NuBeginnings]

[quote user="Chancer"]

The question now is where do I get the €1.5 million to play your game seriously [:D]

I have a strange feeling that you may have already worked out the answer to your question given the investment you have made in your property.

Actually the reform of the ISF may really work out well for you.

[/quote]

You are correct in your assumption, this is kind of what we ended up doing, along with having to form an SCI and a SARL

SCI to own the building

SARL to rent the building from the SARL

On 1.5m you are paying a significant amount in wealth tax as you know.

Thus is it better to borrow the money to buy the property, i.e in a back to back loan.

Which means giving the bank your 1.5 to hold as security.

The bank would then lend you the 1.5 to buy your dream home, thus its a loan there for classed as a debt, thus you are saving a significant sum on wealth tax.

For example bank lends you 1.5 at say 2% interest the bank then invests your 1.5 with your permission in to something like Euro bonds which could yield lets say 3% for arguments sake.

So you have saved on wealth tax and your making 1% on your money and living in your dream home, and making a living out of it.

That works well if the bond rate stays higher than the interest your paying, which it is at the moment.

Euro bonds was a safe example, you can get better yields but greater risk.

I have simplified things to make the post short.

I am looking forward to seeing what happens with the ISF :-)

As for not being able to buy a chateau for 1.5 depends were your looking. I know as I looked long and hard. You can buy Chateaux for that price, and not just ones that are falling to bits.

[Chancer]

My initial investment was a fortieth of yours and I naively didnt even think about the tax implications, when I do decide to cash in and bail out I may have a significant exposure.

After a couple of years I realised that perhaps I should have done something similar to the SCI/SARL route but it was too late, to do so then would have resulted in paying notaires fees and charges once again but on the already considerably increased market value.

I just roll with the punches now, whatever the situation is when you do your planning (or in my case dont!) and make your decisions it is likely to change in the future and be outside of your control.

But I do agree its interesting and a bit nail biting watching the evolution of these reforms.

Like I say I did no research and just seized an opportunity that seemed right for me at the time and which I dont regret, however the constantly changing fiscale situation must be a turn off for any would be investors in France except perhaps from hereonin the mega rich

[NuBeginnings]

Very true, "Constantly changing fiscale situation must be a turn off for any would be investors in France except perhaps from hereonin the mega rich"

But even if you're not rich, research and planning pays.

We fell in love with the Chateau we brought. We wanted to buy and move in asap, after good advise which cost a lot we had to step back and not rush.

It pays to seek good advise in the long run.

Now don't get me started on inheritance tax as thats of my pet hates.

[Babbles]

As I said you can't buy a Chateau in our area, ( 20 mins from the med) not even a run down one but sure you can else where in france.