Italy, Spain, Portugal, Greece … the countries where the sun reigns supreme attract French investors over 60, anxious to retire in a pleasant environment.
European capitals are also popular for buying a second home: for the same budget, in Berlin or Vienna, a French buyer can become the proud owner of an apartment twice as large as in Paris. A great enthusiasm that must, however, be mastered and properly orchestrated to avoid any disappointments.
What is the real estate environment of the destination country?
The law applicable to the sales contract is that of the country of purchase. Just like the civil rules relating to property, sharing, taxation… Note that if the property purchase is intended for rental, the provisions linked to the collection of rent depend directly on the agreement between the country in question and France.
Therefore, it is imperative to be well informed before any purchase. For example, in Thailand, foreigners can only buy a house. Land ownership is reserved exclusively for nationals of the country.
Note that some countries require authorization and / or payment of a tax, following a purchase on their territory. It is also necessary to collect information on the procedures related to the resale of the good in question: the procedures of repatriation of the capital, the transfer of the currencies…
In which country is it better to borrow?
To finance this purchase abroad, it is quite possible to go through a foreign bank. It is therefore important to learn about the regulations around credit. For example, certain foreign organizations will not accept to finance you, if your income is collected in France; others will not allow early repayment before 10 years of borrowing, etc.
The advantage of favoring a French bank for this type of transaction is to benefit from the Scrivener on the protection of borrowers. Not to mention that its requirements in terms of personal contribution are often significantly lower than those of foreign banks (30%).
If the protection of borrowers is better in France, the granting of a loan to buy property abroad is not easy. French organizations imperatively needing a solid guarantee. Consequently, few banks agree to finance this kind of operation …
What guarantees can they ask for?
As French banks will not accept to build a loan on the basis of a mortgage on a property abroad, it is necessary to be able to present them with guarantees on French soil, to hope to obtain a loan offer:
A mortgage on a property in France. Note that if it is already the subject of a mortgage registration, it is possible to take a second mortgage, under certain conditions.
A pledge. Pledging a placement contract as a guarantee can also provide the security sought by French banks.
If the surety companies can lend a hand to investors of property on French soil, most of them will not accept to finance a property abroad and Good Credit, in any case. However, a personal deposit from a family member can supplement a guarantee.
If the purchase of real estate abroad can present many attractions, it is absolutely necessary to use a professional, to properly supervise this operation. The broker will be able to question his banking partners simultaneously. He will know which bank is most likely to accept the file. He will be able to accompany you by bringing you the answers to the notary’s questions, but also will enlighten you on the regulations associated with this purchase.