French or Irish mortgage for french property

Found a nice buy-to-let 2 bed appartment in Languedoc region , France , hoping to rent it at summer season and use it personnally whenever possible .
Bit tempted now between getting an Irish mortgage or French mortgage or mix .

With deposit of 40K I did some homework :

- I have mortgage approved in principle with Franch bank , through a broker , with 3 mortgage options to choose from , interste rate range 5.5%-6.37% . estimated Notaire fees , tax , loan guarentee = 7% of purchase price .

- I have mortgage approved in principle with Irish bank which could cover the full price of the french property , after release some equity from Irish property , interst rate 5.9% variable for the full loan ( Irish property + French one ) . How can I calculate Notaire fees , tax , loan guarentee based on this option ?

Am I better off going for French mortgage To be able to offset expences againist rent , or I go for Irish mortgage knowing I can offset cost of furniture + cost of my trips to France againist rent , or I maximise the deposit ( 40K cash + borrow from Irish bank to pay big deposit ) and go for small French mortgage .

Which of those options sounds financially better , Anyone has experience on this please advice

Thanks in advance

You can offset the interest paid on an Irish equity release loan against rental income, when doing your French tax returns. However, it would be better to get a letter from your Irish lender stating that they understand the funds are being borrowed to buy an investment property in France, just to be safe. You can also depreciate the capital cost & furnishing cost of the apartment at a rate of 3% (usually) when doing your French taxes, so all-in-all you probably will not have any taxble profits in the French returns.

You will also have to declare the income in your Irish tax returns. Again you can offset expenses & interest, but not depreciation of the apartment, just the Furniture.

The combined purchase costs, including Notaire are usually 7% to 10%, but you are entitled to ask their fees before proceeding. If you borrow from an Irish lender, you probably will pay no Loan Guarantee fee, no arrangement fee to the Lender and no arrangement fee to the Mortgage Broker, but a French mortgage may include all three fees.

Thanks "dovest" for your reply.

dovest said:

You can offset the interest paid on an Irish equity release loan against rental income, when doing your French tax returns.

If that's the case so French mortgage doesn't make financial sense , right ? Furthermore , with Irish mortgage you will have more peace in mind

Have you got a rough idea what percentage would be the Loan Guarantee fee, arrangement fee to the Lender and arrangement fee to the Mortgage Broker ? Property price in the range of 180-200K

Thanks again

Click to expand...

re: notary fees, if its new build its only 4.5%. If its resale under 5yrs, the same.

french mortgages are more expensive but easier to declare

Thanks for your replies .

Is it possible to go for Irish mortgage now and later on , if I find more benefits from French mortgage , I apply to french bank for some or all of the mortgage ?

cheers

Also, don't forget that life assurance is mandatory with French mortgages, even for investment properties. So, depending on the usual (age, health etc.), this might add significantly to the cost.

Also, you can choose to pay French tax at a flat rate - 25% tax on 28% of the income or something (not sure) in which case you just file a very simple return in France. In that case, it would not matter where your mortgage was as you would not file all the expenses. Having said that, I guess the tax system could change at any time so I don't know if you should rely on that.

Am I missing my chance to purchase in French Riviera

Hi ,
Heading next week to Languedoc area ( South west of France ) to look for/purchase 2 bed apartment . I prefer to buy in French Riviera but after research I found out that I have no chance . I am seeking your expertise to confirm that I have no chance to purchase an apartment in CDA with the following criteria :
- Small budget 160-180K Euro
- 2 bedrooms apartment newly or max 5 years old
- size 55m2 +
- maximum 500 meter from the med beach
- within max 5 KM away from city ( Nice , Cannes , St Tropez , Antibes ...etc)
- In rent able area ( seasonal rent )
- Non Leasback , prefer buy to let
I appreciate your feedback

Re: Am I missing my chance to purchase in French Riviera

Did you not ask this recently on this forum. I don't believe you will get what you are looking for with that budget in CDA

Re: Am I missing my chance to purchase in French Riviera

Duplicate threads merged. hakouna - please read the posting guidelines.