February 2015 – French Mortgage Transaction of the Month

February’s French mortgage transaction of the month is another demonstration of how more and more bit ticket French property buyers are making the most of the super low mortgage rates in France.

The transaction was on a €1.9m loan fixed over 18 years at an incredible 2.75%. The property was a €3.5m chalet in the French Alps.

The buyer used an SCI (Société Civile Immobilière) to structure the purchase. 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.