In the table above it is totally neutral tax

When the credit rates are high, the question is incongruous. But when they are at the floor level, as is currently the case, it is worth to be asked. Borrow all the money for the purchase of his property allow savings of EWB When it comes to the purchase of a principal residence, one might think. First because all borrowed amounts constitute a debt under the ISF and should as such be exempt the total sums are submitted. Then, because the principal residence enjoys a deduction, not capped (it's more and more rare to be reported), 30 of its value, the title of the wealth tax.

Fiscally neutral for French tax residents

This is only a sham. "100 Debt to purchase a principal residence will not lower French tax residents Lai", corrects to at the outset the Tower of Artaise Hervé, President of the French Association of certified wealth management advice. In the table above, it is totally neutral tax. Therefore, you pay less EWB through all of the value of your principal residence. On the other hand, "is to acquire his principal residence which lowered the ISF, through the reduction of 30, regardless of the method of financing: use of existing financial assets or borrowing", continues the Tour of Artaise Hervé. The loan, if it is neutral tax, however, allows especially when interest rates are low, "to purchase something of greater value and thus increasing the potential of deduction of Lai", complete master Michaël Dadoit, notary to played-lès-Tours, group Monassier.

A recommend to the unpatriated...

Since the financial crisis which occurred in the fall of 2008, many French settled in the City for example have back Channel. These unpatriated of return of London or indeed enjoy a preferential tax regime. "They have interest, notably to minimize their ISF, to borrow the full amount required for the purchase of a principal residence they buy on their return to France," explains Loïc Lair, Director of heritage engineering at HSBC Private Bank France. Normally, all persons domiciled in France are subject to the ISF for all their property that they are located in France or from France. But to encourage the return of persons transferring their tax residence in France, their assets located abroad are excluded from the base of the ISF during the five years following their return. These people have therefore no interest to pay their financial assets held abroad and exempt of EWB to buy their residence in France. "They can resort to the loan, the amount coming to the deduction of a principal residence, which will minimize the amount under the ISF," says Loïc Lair.

.. .and to foreigners who buy real estate in France

The use of borrowing to finance the purchase of real property in France full is also advised to foreigners. They are taxable at the ISF that for their property situated in France, with the exception of their financial investments, which in are specifically exempt. The real estate purchased in France is taxable at the ISF, they have an interest to minimize the amount via the full loan, by the same mechanism described above for the unpatriated.