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I wonder the following: can a French plan épargne logement (PEL) be used to purchase a property located outside France?

https://www.service-public.fr/particuliers/vosdroits/F16140 does not indicate any condition on the location of the property, but thelocal.fr mentions (emphasis mine):

If you are looking to buy a home in France - or refurbish a property - then you might consider either the PEL (Plan épargne logement) or CEL (Plan épargne logement).

so I am confused on whether a PEL can be used to purchase a property located outside France.


From https://www.service-public.fr/particuliers/vosdroits/F16140 with Google Translate:

PEL opened before March 1, 2011**:

The home savings loan can be used to carry out one of the following operations:

  • Purchase of the main residence (new or old)

  • Construction of the main residence (purchase of land and construction work)

  • Extension, repair or improvement work on the main residence (raising, energy saving, facade renovation of a condominium building, etc.)

  • Acquisition or subscription of shares in SCPI (real estate investment companies) for residential purposes

  • Construction or acquisition of a second home (new)

  • Renovation or extension of a second home

  • Acquisition of a leisure or tourist residence

Original text:

PEL ouvert avant le 1er mars 2011** :

Le prêt épargne logement peut servir à réaliser l'une des opérations suivantes :

  • Achat de la résidence principale (dans le neuf ou dans l'ancien)

  • Construction de la résidence principale (achat du terrain et travaux de construction)

  • Travaux d'extension, de réparation, ou d'amélioration de la résidence principale (surélévation, économie d'énergie, ravalement de façade d'un immeuble en copropriété...)

  • Acquisition ou la souscription de parts de SCPI (Sociétés civiles de placement immobilier) à vocation d'habitation

  • Construction ou acquisition d’une résidence secondaire (dans le neuf)

  • Rénovation ou extension d’une résidence secondaire

  • Acquisition d’une résidence de loisirs ou de tourisme

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    The savings stacked in a PEL account are rarely enough to buy a property outright, but the PEL arrangement gives you access to loans/mortgage at a potentially preferential rate. This mortgage, beside the preferential rate, will still need to be agreed by the lending bank, and the lending bank will only accept lending if a number of conditions are respected. One such condition is almost always that the bank can get a lien on the property to secure the mortage, which they cannot do with an oversea property so they will not offer you the mortgage in the first place.
    – Hoki
    Commented Jan 10 at 12:51
  • @Hoki thanks That's a great explanation, would you mind posting this as an answer? Commented Jan 10 at 14:31

1 Answer 1

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Most likely NOT

The French PEL is a type of government backed saving account. There are various rules about the length of time the account can be opened, and minimum and maximum amount the account can hold.

The maximum amount (not counting accrued interests) which can be deposited on a PEL over its lifetime is 61,200 € (about 56,150 USD or 52,750 GBP). Hardly enough to buy a decent property in many parts of the world and certainly so in France (except may be for a dilapidated barn on a remote piece of land).

The main benefits of holding a PEL account is that as long as you respect a series of conditions about regular deposit and holding time (at least 4 years), you then get:

  • a tiny interest boost from the state
  • access to mortgage at a potentially preferential rate.

When you decide to purchase a property, the PEL account is closed, the money is usually used as the initial deposit, and a bank will provide the remaining amount through a mortgage.

Note that you are allowed to simply cash in your PEL and do what you want with that money. If you find a property, in France or anywhere in the world, which you can pay cash with that money, no one is going to stop you.

The reality is for most people the money accrued in the PEL represent only a percentage of the purchase price of the property they are looking at, so they will need to arrange a mortgage with a lender.

When a lender provides a mortgage backed by a PEL, they have to do thing slightly differently for the calculation of the rate offered, but for everything else they will apply all their normal lending criteria and conditions.

One of the main, deal breaking, condition for most lenders (not just in France) is that the bank has to be able to put a lien on the property to secure the mortgage (i.e. the bank wants a guarantee it can reposses the house if repayments fall behind).

Since the bank cannot get this guarantee on an oversea property, it will never agree to give you the mortgage in the first place.

This is not specific to a mortgage backed by a PEL, any "normal" residential mortgage in France will require a similar conditions and will prevent using this vehicle to finance a large puchase oversea.


Now there exist ways to get your local bank to finance oversea assets, but that involve different financial instruments than a PEL. You can check my answer to a question about this (although the question is in reverse the reasonning for the answer is the same): Can I get a mortgage from a foreign bank?

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