Araucaria Posted October 2, 2013 Share Posted October 2, 2013 My daughter is thinking of buying a semi-derelict property in France. It couldn't be habitable until a couple of years later: there will be quite a lot of work needed. She might subsequently relocate to France to live in the property and work here (or she might not). Is there an advantage in having a mortgage from a French bank? I am completely ignorant here, so please treat this as a genuine question! Would a French bank loan enable her to set all/some of the interest payments against any French tax she might pay? Are there any other considerations (aside from the exchange rate risk)? Might the bank feel happier if we were to act as guarantors (or doesn't that work in France)?Thanks in advance. Link to comment Share on other sites More sharing options...
EuroTrash Posted October 2, 2013 Share Posted October 2, 2013 I suspect that the improbability of a non-resident getting a mortgage on an uninhabitable semi-derelict property from a French bank will make this a purely academic question.Even for a person who works in France and wants to buy a habitable house to live in, getting a mortgage is not a foregone conclusion. Not only are French banks very risk-averse as regards the borrower, they are also very picky about the properties and will sometimes refuse because the house isn't energy-efficient enough to meet their criteria. Link to comment Share on other sites More sharing options...
andyh4 Posted October 2, 2013 Share Posted October 2, 2013 Sadly your thoughts echo mine, but if she were to get a mortgage and was French tax resident then the interest payments can be off set against tax for the first 5 years of the mortgage - I believe. Link to comment Share on other sites More sharing options...
Araucaria Posted October 3, 2013 Author Share Posted October 3, 2013 Thanks - but that is a bit discouraging! Any idea where I might be able to find out whether the interest can really only be offset for the first five five years of the loan? because if that is all it is, there would be almost no point at all in going to the bank. Link to comment Share on other sites More sharing options...
NormanH Posted October 3, 2013 Share Posted October 3, 2013 The service public gives a general over-view, but obviously you need to speak to a few lenders:http://vosdroits.service-public.fr/particuliers/N20373.xhtml Link to comment Share on other sites More sharing options...
idun Posted October 3, 2013 Share Posted October 3, 2013 [quote user="Araucaria"]Thanks - but that is a bit discouraging! Any idea where I might be able to find out whether the interest can really only be offset for the first five five years of the loan? because if that is all it is, there would be almost no point at all in going to the bank.[/quote]'because if that is all it is????'I reckon that that is a great help, not that the french government will cover all the interest either, there will be a plafond and a percentage limit on it. Link to comment Share on other sites More sharing options...
andyh4 Posted October 3, 2013 Share Posted October 3, 2013 [quote user="Araucaria"]Thanks - but that is a bit discouraging! Any idea where I might be able to find out whether the interest can really only be offset for the first five five years of the loan? because if that is all it is, there would be almost no point at all in going to the bank.[/quote]Have a look at your last French tax return. Memory tells me it is on page 3, Interest paid for mortgages taken out after XXX Link to comment Share on other sites More sharing options...
Araucaria Posted October 4, 2013 Author Share Posted October 4, 2013 [quote user="idun"][quote user="Araucaria"]Thanks - but that is a bit discouraging! Any idea where I might be able to find out whether the interest can really only be offset for the first five five years of the loan? because if that is all it is, there would be almost no point at all in going to the bank.[/quote]'because if that is all it is????'I reckon that that is a great help, not that the french government will cover all the interest either, there will be a plafond and a percentage limit on it. [/quote]....because she's not likely to be able to move into the property (and move to France) for several years, perhaps knocking out three or four of the first five years that are allowed. The property needs a lot of work to make it habitable, which she'd be doing herself (with our help) as her budget is limited. Link to comment Share on other sites More sharing options...
idun Posted October 5, 2013 Share Posted October 5, 2013 I don't understand. Getting five years help is surely 'good' no matter when one gets it. So surely it is not knocked out and would always be a good saving, why would it not be?? Link to comment Share on other sites More sharing options...
andyh4 Posted October 5, 2013 Share Posted October 5, 2013 Because it is only valid for the first 5 years of the mortgage and you have to be fiscally resident to claim it. So if you take out a mortgage, but are a second home owner for the first 5 years, then you will get nothing. I do not have a problem with this personally, but I can see how it could be a disadvantage if the decision to buy or not to buy is in the balance. (incidentally I got one years worth out of the fiscs for the reason stated above. Not to be sniffed at, but then I knew I was coming to France permanently from the day we decided to look for somewhere to buy.) Link to comment Share on other sites More sharing options...
Araucaria Posted October 5, 2013 Author Share Posted October 5, 2013 [quote user="andyh4"]Because it is only valid for the first 5 years of the mortgage and you have to be fiscally resident to claim it. So if you take out a mortgage, but are a second home owner for the first 5 years, then you will get nothing. I do not have a problem with this personally, but I can see how it could be a disadvantage if the decision to buy or not to buy is in the balance. (incidentally I got one years worth out of the fiscs for the reason stated above. Not to be sniffed at, but then I knew I was coming to France permanently from the day we decided to look for somewhere to buy.) [/quote]Thanks Andy - you do seem to see it the same way I do. I am not quite sure, though, whether Idun hasn't got something else in mind, but what it is - no idea. Link to comment Share on other sites More sharing options...
idun Posted October 5, 2013 Share Posted October 5, 2013 Nothing else in mind, just had not gone right back to the beginning, where you did say that she was not a french resident. [blink] Link to comment Share on other sites More sharing options...
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