Q: What is the First Demand Guarantee?

<h3 id="dcolor3faae1whatisthefirstdemandguarantee">${color}[#3faae1](What is the First Demand Guarantee?)</h3> <p>The <strong>first demand guarantee</strong> is a security which commits the guarantor (in this case the borrower), in the context of an bond subscribed by a third party (in this case the investor), to repay the sum due, either on the first demand of the creditor, or according to previously agreed terms. This guarantee is on the same level as a personal guarantee when given by a company.</p> <h3 id="dcolor3faae1relatedarticles">${color}[#3faae1](Related articles)</h3> <ul> <li><a href="/en/article/what-is-a-personal-guarantee-katmdc/">What is a personal guarantee?</a></li> <li><a href="/en/article/what-is-a-mortgage-qtoy3b/">What is a mortgage?</a></li> <li><a href="/en/article/what-are-the-risks-involved-1u4orhn/">What are the risks involved?</a></li> </ul>

Question 1

What is the First Demand Guarantee?

Accepted Answer

${color}[#3faae1](What is the First Demand Guarantee?)

The first demand guarantee is a security which commits the guarantor (in this case the borrower), in the context of an bond subscribed by a third party (in this case the investor), to repay the sum due, either on the first demand of the creditor, or according to previously agreed terms. This guarantee is on the same level as a personal guarantee when given by a company.

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Question 2

What is construction and sales civil company?

Accepted Answer

${color}[#3faae1](What is construction and sales civil company?)

A construction and sales civil company (SCCV) is a form of company widely used by developers. The SCCV functions like a classic civil company, it is its corporate purpose that is specific. The SCCV is not taxed directly, it is said to be transparent. Indeed, taxes are paid by its parent company if it is owned by another company or deducted from the income of each partner if it is owned by one or more individuals. Its duration is 99 years maximum but it ends as soon as its purpose is fulfilled (e.g. end of construction and sale of units). In the case of a bond loan, it is the holding company or SAS that owns the SCCV that carries the loan.

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Question 3

What is the sale in future state of completion (VEFA)?

Accepted Answer

${color}[#3faae1](What is the sale in future state of completion (VEFA)?)

VEFA stands for sale in future state of completion. It consists, for a purchaser, of buying a home off-plan and therefore not completed. The VEFA is a contract between the purchaser and the developer which guarantees the completion of the construction for the purchaser and allows the developer to be paid as the work progresses. To do this, a payment schedule is set by the developer and the balance is paid on delivery of the property by the purchaser. In the case of a VEFA sale for residential properties, the developer is obliged to take out a Financial Guarantee of Completion to guarantee the completion of the work.

In addition, there are tax advantages linked to buying a new property: reduced notary fees because it is a new property (2 to 3% compared to 8% for an old property), the Pinel law which allows you to benefit from tax advantages by renting the property for a minimum of 6 years, and zero rate loans to finance up to 40% of the purchase of a new property, the costs of which are covered by the State.

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What is the Financial Guarantee of Completion?
What is real estate crowdfunding?

Question 4

What is real estate crowdfunding?

Accepted Answer

${color}[#3faae1](Real estate crowdfunding: definition)

Real estate crowdfunding is an investment that allows investors to lend to real estate operators. The platform brings together project owners and investors, allowing the former to finance his operation and the latter to make his savings grow. *

The operator, the borrower, issues a bond and the investor participates in the bond issue by becoming a lender.

${color}[#3faae1](Real estate crowdfunding market figures in France in 2021)

The real estate crowdfunding market in France is booming. Growth is accelerating every year to reach nearly €960 million collected in 2021** (+90% vs 2020). The number of operations financed through crowdfunding has exploded with more than 1,000 operations, i.e. +81% compared to 2020. The average duration of an investment is 21.2 months with an average gross annual return of 9.21%.

${color}[#3faae1](How does it work?)

By participating in a bond issue, the investor lends :

With an interest rate fixed in advance, typically between 8 and 12%;
Over a pre-determined period, typically 12 to 36 months.

The operator pays interest annually to its lenders and repays the capital on the maturity date of the project. This date usually corresponds to the sale of the operation.

${color}[#3faae1](What types of operations?)

The real estate operations concerned by real estate crowdfunding are varied:

Real estate development: construction of new housing;
Deve

Question 5

What taxation for real estate crowdfunding?

Accepted Answer

${color}[#3faae1](The taxation of real estate crowdfunding for French tax residents)

Real estate crowdfunding is a bond investment. The interest received is therefore subject to capital taxation, so you have two choices:

Flat tax: 30% tax on interest received during the year (12.8% tax and 17.2% social security contributions),
Integration with income and taxation at the marginal bracket of the income tax and social security deductions of 17.2%.

The second option applies to you if your income is less than €25,000 (for a single person).

${color}[#3faae1](How is the tax levied?)

When you receive interest, the platform pays the gross interest into your Raizers account and instantly deducts the Flat Tax. The platform takes care of the declaration and payment of these taxes to the French Treasury.

To follow these transactions, go to the My account section of your investor account.

${color}[#3faae1](How to be exempt from income tax?)

If you are exempt from income tax, and in order to be exempt from income tax deduction for the year Y+1, you must regularise your tax situation with the platform from your profile in the My tax area. The exemption from deduction must be provided to the platform before 30 November of year Y.

See How do I fill in my exemption from deduction?

${color}[#3faae1](You are a foreign tax resident)

If you are a foreign tax resident and you receive interest on our p

Question 6

What is mass of bondholders?

Accepted Answer

${color}[#3faae1](What is mass of bondholders?)

The bondholders' group represents all the bondholders of a project as a single entity. The representative(s) have the power, on behalf of the bondholders, to make decisions in the common interest. In the case of a project financed on our platform, Raizers represents the bondholders' mass.

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