Property dealer
A property dealer (marchand de biens) is a professional who habitually acquires real estate in their own name for resale at a profit — after renovation, subdivision, or change of use — and whose activity is classified as commercial by the French tax authority when it is carried on regularly. This classification opens access to specific financing structures but also implies short holding periods and specific tax treatment.
Key points
- The habitual and profit-seeking nature of the activity is key to tax classification: there is no fixed legal threshold — it is assessed case by case.
- The marchand de biens may benefit from a VAT-on-margin regime for resales of properties acquired inclusive of VAT, under specific conditions.
- Reduced transfer duties at purchase (0.715% instead of ~7–8%) apply if the dealer commits to reselling within five years.
- Financing is often structured as a bridging loan or short-term professional loan, with the bank underwriting the resale value.
- If the resale deadline is missed, the reduced transfer duties are clawed back with penalties and interest.
Frequently asked questions
How does a bank underwrite a financing file for a property dealer?
The bank focuses less on monthly debt capacity and more on the exit value of the property (estimated resale price) and the soundness of the business plan: renovation costs, resale timeline, projected net margin. The dealer's track record (past deals, historical margin) is also key. The broker acts as a translator between the dealer's asset logic and the bank's risk criteria.
What is the difference between a rental investor and a property dealer?
A rental investor acquires a property to hold and collect rent over the long term; any capital gain on resale is taxed under the personal real-estate gains regime (with holding-period discounts). A property dealer buys to resell quickly: the margin is treated as commercial income (BIC) with no holding-period discount. The two profiles have very different financing needs, tax positions, and banking relationships.
Why do property dealers use specialized brokers rather than their usual bank?
Property dealer transactions have atypical characteristics — short duration, resale-value underwriting, VAT on margin, reduced transfer duties — that few bank branch managers fully understand. A specialized broker knows which lenders have dedicated facilities for this type of deal and can present the file in the right language. They can also access alternative lenders (debt funds, real-estate crowdfunding platforms) to complete the financing structure.
In practice
A property dealer identifies a dilapidated 6-unit apartment building in Bordeaux, planning to renovate and sell the units individually within 18 months. Their broker structures a two-tranche deal: a short-term professional loan for acquisition and a renovation loan drawn progressively during construction, both underwritten against a resale estimate of 140% of the combined purchase and renovation cost.
Official sources
- Property dealers: taxable persons (BIC) · BOFiP — impots.gouv.fr
- The banking-operations intermediary (IOBSP) · ABE Info Service (Banque de France / ACPR)
- Single register of intermediaries · ORIAS