Expatriate real estate credit

Few non-resident French people know this, but it is possible to borrow from French banks when you want to invest in France. The conditions are slightly different from a loan taken out by a French resident, and the banking circuits are also different. However, the loans are still very interesting and open up interesting investment opportunities. Focus on the important points when you want to borrow to invest from abroad.

The notion of tax resident or non-resident for French banks

The term resident and non-resident in this case has to be assessed in thetax sense. Article 4B of the French General Tax Code provides a definition of what is called "domicile fiscal". An expatriate can be considered as fiscally domiciled in France if he meets one of these 3 criteria:

• persons who have their home or main place of residence in France (stay for more than 6 months in a year);

• those who carry out a professional activity in France, whether employed or not, unless they can prove that this activity is carried out in France on an ancillary basis;

• those who have their economic interests in France;

• government officials performing their duties or missions in a country where they are not subject to personal tax on all their income.

Spouses or partners bound by a PACS are subject to joint taxation, so if one or the other meets one of the above criteria, the tax household will be established in France.

Putting together your real estate loan file, to invest in France

It is more difficult for a non-resident to obtain financing for a property. The banks will certainly be more fussy and much more careful than in the case of a French resident, because they consider the situation to be more risky. In concrete terms, in the event of non-payment they will find it more difficult to recover the funds when the person is abroad.

The first point to highlight is the difficulty of scheduling an appointment with the bank given the expatriate's geographical distance. The file must therefore be put together with the greatest care in order to avoid numerous exchanges of letters that could delay obtaining the loan.

Le deuxième point est que les documents réclamés par la banque sont plus difficiles à contrôler. Les entreprises étrangères n’établissent pas leurs bulletins de salaire comme les entreprises françaises. Le contrôle bancaire des relevés de compte ne peut se faire de façon précise et la banque est dans l’impossibilité de savoir si plusieurs comptes ont été ouverts à l’étranger.
 

Conditions for obtaining a loan when you are a non-resident

Borrowing rates in France are among the lowest in the world. Currently (January 2020), the best rates in French banks are 1.05% for 15 years, and 1.15% for 20 years, excluding insurance. By way of comparison, rates in Portugal are over 3% and 8% in Mauritius, where we have clients. The difference is therefore very favourable to investors who wish to invest in France.

As a non-resident, the bank will apply a surcharge of between 0.20% and 0.40% compared to the rate given to a French person, in remuneration of the risk.

The expatriate will certainly have to return to France for professional or personal reasons or at the end of his assignment. This poses a problem for banks who consider that once the expatriate returns, he will lose purchasing power as he will not have the same income as abroad. Furthermore, as the credit obtained is, most of the time, without commercial consideration, the interest rate will be higher than for French people living in France.

But even with the addition of this premium, the rates you get are still excellent.

La différence porte également sur le niveau d'apport demandé : 25% minimum de l'opération pour un français non résident. 
Si vous souhaitez être mis en relation avec un courtier spécialisé dans l'investissement des français non résident, vous pouvez me contacter directement par mail : contact@investissement-locatif.com.

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