Ultra‑high‑net‑worth (UHNW) buyers face mounting complexity when acquiring property across borders. This case study explores how integrated banking expertise helped a client secure tax‑efficient financing for a prime Paris acquisition with a solution built on understanding their full cross-border portfolio and risk profile.
UHNW international property buyers often encounter legal and logistical hurdles that can delay or derail a transaction. Navigating cross‑border legal frameworks and tax exposure requires integrated expertise across real estate, lending and wealth planning.
In a recent case, a new‑to‑bank US client sought financing for a prime acquisition in the ultra-competitive Paris residential market. The transaction was complicated by France’s real estate wealth tax and the need to fund renovation works in a compliant and efficient way.
Where the client’s incumbent banks were unable to structure a viable solution, our teams in London, Luxembourg and New York collaborated to design a financing approach aligned with French regulatory requirements and the client’s wealth strategy.
100% LTV acquisition financing for complex Paris property purchase
The US-based billionaire – who had no prior European banking relationships – was seeking mortgage finance to cover the renovations, as well as the purchase price. The property was not in a habitable state and the budgeted capital expenditure was similar to the acquisition price.
This ability to simplify cross-border wealth management through integrated and collaborative banking enables us to deliver outcomes clients want but may struggle to secure elsewhere.
Neil Bantel
UHNW Relationship Manager
Owners of French real estate are subject to an annual tax on the net value of their property – provided it exceeds €1.3 million – under the L'Impôt sur la Fortune Immobilière[1].
“The financing therefore needed to be mortgage-secured upon acquisition” says Neil Bantel, UHNW Relationship Manager at Deutsche Bank. “Furthermore, it needed to exceed any reasonable lending value that might be secured against the property in its existing state of disrepair.”
Collateralising securities: a tax-efficient solution
A solution built with an understanding of the client’s full cross‑border portfolio and risk profile was required. The client was willing to collateralise the loan with a diversified portfolio of securities, but would not move those assets outside the US.
This is where Deutsche Bank’s international capabilities became critical. Wealth management and financing specialists in London and Luxembourg worked closely with US lending and relationship teams to find a way forward.
Deutsche Bank New York took custody and security of a diversified equity portfolio and issued a standby letter of credit (SBLC) in favour of Deutsche Bank Luxembourg to provide a guarantee enabling collateralisation of the loan. The pre-determined value of the SBLC will be increased at specified intervals to accommodate the refurbishment expenditure.
Under this agreement, Deutsche Bank was able to offer the client 100% loan-to-value (LTV) mortgage finance in a highly tax efficient arrangement.
Delivering through cross-border collaboration
The deal was run by our team in London, where Bantel is based, in close collaboration with colleagues in Luxembourg, which provided the financing, and New York.
“This financing proposition highlights Deutsche Bank’s compelling cross-border offering for UHNW clients,” says Bantel. “An innovative intra-bank guarantee – made possible as all our booking centres work under the same banner – delivered a unique solution that competitors could rarely match.
“This ability to simplify cross-border wealth management through integrated and collaborative banking enables us to deliver outcomes clients want but may struggle to secure elsewhere.”
