One of the biggest misconceptions I encounter is that borrowing is only relevant for people who have no liquidity.
Among many of the private clients I advise, the opposite is often true.
Whether they are purchasing a home in Paris, a villa on the Côte d’Azur or a chalet in the French Alps, the conversation rarely starts with how much they can borrow. More often, it begins with a discussion about liquidity, investment strategy and how the purchase fits within their wider financial affairs.
Many of these clients have the resources to purchase outright. The more important question is whether they should.
Looking Beyond a Cash Purchase
Buying a property in cash can seem like the simplest option. However, for individuals with substantial wealth, simplicity does not always equate to efficiency.
Capital is often invested across diversified portfolios, businesses and other appreciating assets. Releasing large sums to purchase a property outright can mean reducing investment exposure, concentrating wealth in a single illiquid asset and limiting flexibility for future opportunities.
For this reason, many sophisticated buyers view borrowing very differently. Rather than seeing debt as a necessity, they see it as a strategic tool that enables them to preserve liquidity whilst allowing their capital to remain invested.
The focus shifts from financing a property to deploying capital in the most efficient way possible.
Structuring Finance Around Existing Wealth
International lending has evolved significantly in recent years, particularly for high-net-worth individuals with established investment portfolios.
Depending on a client’s wider financial position, it may be possible to combine a French mortgage with lending secured against eligible investment assets. In certain circumstances, this can enable up to 100% of the purchase price to be financed, subject to lender criteria and individual circumstances.
The objective is not simply to maximise borrowing. It is to avoid unnecessarily disrupting a carefully constructed investment strategy.
Many clients would rather continue benefiting from long-term investment growth than liquidate assets to fund a property purchase. Structured correctly, borrowing can help achieve both objectives.
France’s Wealth Tax
Another important consideration for many purchasers is France’s Impôt sur la Fortune Immobilière (IFI).
IFI applies to qualifying net real estate assets above the relevant thresholds. As the tax is generally calculated on the net value of eligible property holdings, qualifying debt secured against the property may, subject to the applicable rules and each client’s individual circumstances, reduce the property’s taxable value.
Tax should never be the sole reason for borrowing, but it is often an important part of a much broader conversation.
When clients are already considering how best to preserve liquidity, maintain investment exposure and structure the acquisition efficiently, the interaction between borrowing and IFI is another factor that should be considered alongside advice from appropriately qualified tax advisers.
Preserving Liquidity Creates Choice
One of the themes I discuss most frequently with clients is liquidity.
Retaining access to capital creates options. It allows families to respond to investment opportunities, support business interests, assist future generations or simply adapt to changing circumstances without having to dispose of long-term assets.
For many internationally mobile families, preserving liquidity is every bit as valuable as acquiring the property itself.
Some lenders may require assets to be pledged to them in order to lend. This can be done by moving existing liquidity which remains liquid or by raising additional capital as part of the lend to create even more liquidity.
This is one of the reasons that borrowing has become an increasingly important part of private client wealth planning. The objective is not simply to acquire an asset, but to do so without compromising the wider balance sheet.
Lending as Part of a Broader Strategy
The most successful property acquisitions are rarely viewed in isolation.
They often sit alongside investment management, tax planning, succession planning and broader family wealth considerations. Finance should complement those conversations rather than exist separately from them.
Every client has different objectives, which is why there is rarely a single solution. The role of a specialist adviser is to understand the wider picture, identify the most appropriate lending structure and work alongside private banks, wealth managers, tax advisers and legal professionals to ensure finance supports the client’s long-term strategy.
In my experience, the conversation has moved well beyond whether a client can obtain finance.
Today, it is about whether borrowing can help preserve wealth, maintain flexibility and make better use of capital over the long term. For many high-net-worth individuals acquiring property in France, that is proving to be a far more valuable discussion.
This article is provided for general information only and does not constitute financial, investment, tax, legal or mortgage advice. The suitability and availability of any lending structure will depend on the applicant’s individual circumstances, the property, lender criteria and applicable laws and regulations.
A mortgage is secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Mortgage deals may not be available, and lending is subject to individual circumstances and status.
