You wish to donate a property but the financing of your property is still running. Don't panic, you can donate without waiting for the repayment of your loan!

Beforehand it will be necessary to carry out checks. Depending on the result, you will know if you can make the desired donation without having to repay your credit, or not, and under what conditions.

Passing on a property without transferring the loan is a solution that deserves your attention.

For this, it is important to determine whether or not the transfer will cause the loan to lapse; which obliges the donor to repay the loan in advance.

It is also essential to be informed about the guarantee put in place by the lending institution to guarantee your loan: mortgage or privilege of money lender (PPD), bank guarantee organization (Crédit Logement, CAMCA, SACCEF, etc.), pledge of securities or personal security (personal guarantee).
Indeed, the terms will not be the same depending on the guarantee taken by the lender. The agreement of the warranty holder may be mandatory in certain cases.

It is also possible, if your loan contract so provides, to request the lender to put the transferability of the loan into play to the donee while maintaining the same conditions. The burden of the loan would then be transferred to the donee during the donation. This principle can be very interesting if the loan conditions have been negotiated optimally: given the historically low level of borrowing rates in recent months, this can be very interesting.

For transferability to work, it is important to meet the following conditions:
- the debt must have been contracted for the acquisition of the object of the donation,
- the debt must have been contracted with a banking establishment,
- notification in the act of donation of the debt transmitted with the donated property,
- and finally, notification of the change of debtor to the creditor.

If the donation is made, the strategy is advantageous since you will have a reduction in donation rights by deducting the capital remaining due. The donee will only be taxed on the part already reimbursed by the donor.

It is therefore essential to check the general conditions of the loan before proceeding to avoid any unpleasant surprises: obligation to repay, penalties ...

Once these points have been processed, you will be able to:

- make the donation of your real estate while keeping the charge of the mortgage, or
- make the donation of your property by transferring the burden of the mortgage to the donee.

Vigilant point :

In some cases, when a donor makes a donation while keeping the charge of the credit himself, and only valuing the donation up to the net assets (value of the property less capital remaining due), the donation can be reclassified as a disguised donation. Indeed, the asset thus given, the valuation of which is reduced by the capital remaining due for the loan, is subject to much less taxation than if the asset had been estimated for its transmitted value.

Another case in point: that of the donor who makes the donation of his property while keeping the credit charge and whose economic situation deteriorates to the point of no longer being able to ensure the repayment of his credit. If it turns out that the donor has organized their insolvency, then Paulian law will allow them to go back and allow creditors and other lenders to attack the debtor's actions by defrauding their rights. Thus, deeds of donation will be made unenforceable against creditors.

In summary, it is not forbidden to donate a property for which you have taken out a loan but there are many points to check before getting started.

Do you want to donate your property still in the process of being reimbursed? Do not hesitate to contact our Wealth A7 experts who will support you in your project. For any other questions about financing, contact our partner Groupe France Crédit!