• Buying in: Les Menuires 
• Property price: €510,000
• Loan Amount: €357,000
• Mortgage Type: Capital & Interest 
• Mortgage Term: 16 years 
• Interest Rate: 1.70%
• Loan-to-value: 70%

The background

A British couple looking to purchase a secondary residence within the biggest ski area of France, the Three Valleys, set their sights on a new project being constructed in the village of Les Menuires, nested between St Martin de Belleville and Val Thorens. They were keen to own a place in the Alps to use during the holidays. The Alps are notorious for soaring prices during the school holidays and the bill can run up very quickly when going away to shred with a family. What is more, the clients wanted a property to earn some extra income during their absence and hence why they chose to set up a SPV (Special Purpose Vehicle) called SARL de Famille which will soak up both the income and income tax, potentially minimising their own tax exposure in the UK. 

Our approach

Everyone knows that buying a property involves a lot of time and effort. Buying a property in France requires even more paperwork and buying a property using a SARL adds an additional layer of complexity. At French Private Finance, we are specialised in complex purchases including purchases made via SPVs. We understand the client’s needs to optimise their purchase and make the property work hard for itself. Therefore, we liaise with different stakeholders during the application process: the clients, the bank, the notary and accountants. We strive to make the process as smooth as possible for the clients and guide them through each stage. 

Using SARL de Famille to purchase a property may be considered as a “commercial loan” by some French lenders. This tends to reduce the duration of mortgage as well as might increase the interest rates slightly. Oftentimes, we need to trade one for the other. The clients have had a sizeable deposit which meant we could use our network of local lenders to offer the most suitable finance solution. 

We arrived at a consensus with one of the lenders which covers this section of the Alps, by negotiating a rate down by 10 basis points to 1.70% and equally extending the duration of the mortgage by 1 year to 16 years. The rate will remain fixed for the duration of the mortgage which puts the borrowers at ease knowing the exact amount of monthly repayments. 

As we have sourced the finance locally, one of the requirements was that the clients come and sign official paperwork in person. However, due to the present situation, the bank agreed to have the documents signed in the UK and certified by a UK Public Notary.