Credit requirements for non residents in France and Monaco

Non-residents: buying real estate in France – Documents needed to file a loan application.

This procedure is more difficult for non-residents and for those who work abroad.

• On the one hand, banking processes are often more difficult than for the persons permanently residing in France.

• On the other hand, banks often are more demanding to the persons who came to France for a long period than to the ones who permanently resides in this country. So we are very interested in preparing your profile so that you had all chances for success and avoided having an extensive correspondence with the bank.

Documents needed to file a loan application to purchase real estate can be divided into 4 groups:

• The first group includes documents of identification and confirmation of the place of your residence. Your profile shall include a copy of your identification card or your passport. If you filed your loan application together with your spouse, each of you shall produce such document.
A certificate of civil solidarity pact - Un certificat de PACS, a court decision on dissolution of marriage or a marriage contract are also needed, as well as a family book, including the names of your children.
A receipt confirming your payment for electric power, telephone or gas may serve as a document confirming the place of your residence.
In case you live in a leased housing, you will have to submit 3 last receipts for your rental payment or your lease contract. If you use your housing for free, the person providing you with the housing shall issue a certificate and the documents confirming the place of your residence. All the above mentioned documents are part of your file.

• The second group of documents includes references about your income. Three last payrolls, as well as a reference on your salary for December; a work reference or a labor contract; the last tax notification, as well as the last tax declarations 2044 and 2072 shall be present in this group of documents.

• The third group includes documents confirming your financial status at banks. Here you shall submit statements of your bank accounts for the last three months. If you filed your loan application together with your spouse, each of you shall produce such document. A statement of your banking document; loan redemption tables (if you have any current loans); documents confirming your savings shall be also submitted.
 

• The fourth group. If you own a real estate unit, you shall indicate it in your file. In order to confirm it you shall submit a deed of title to property or a notarial certificate for all real estate owned by you; the last notification on the land tax for real estate, lease contracts of investment in construction of lease housing and a copy of an advance contract. This last document may be replaced by a reserve contract or by a liability to sell the financed housing.

• According to the provisions of the National French Law, ‘the persons owning a house or having their main place of residence in France’ receive a status of French tax residents.

The main place of residence is a place where you reside with your family.

• ‘Persons carrying out their professional activity in France, salaried employees or freelancers, unless they do not prove that this activity is an additional one’, shall also comply with the tax liabilities in France.

• Finally, ‘the persons whose financial interests are concentrated in France’ become French taxpayers. This third criterion applies to the persons doing their business in France, who settled their main capital investments there or who receive the main part of their income there.
Double taxation applies when, according to French law, a person is deemed as a person having a tax domicile in France and being registered as a taxpayer in another country at the same time.

The first stage which you should go through in such case is to check whether France has a signed taxation agreement with the relevant country. It can be checked at www.impots.gouv.fr This is an official web site of the French Tax Administration; it has a list of countries France has a taxation agreement with.

If such agreement exists, it serves as a reference when defining the tax domicile. Please note that this agreement only matters in case it complies with the ‘OECD Model’ (Organization for Economic Cooperation and Development).

The mere fact of residing in France or in another country is strictly individual. It means that both spouses in a married couple shall not necessarily be tax residents of the same country: one of them may have a taxation address in France (within Europe), the other may be a tax resident of another country.