Family loan for a home purchase: declaring it, pitfalls

Putting the loan in writing: the IOU

The reconnaissance de dette is the document by which the borrower undertakes to repay the sum lent. It is recommended whatever the amount, and required from €1,500: in the event of a dispute, a written document is needed to prove the loan (service-public.gouv.fr). Above all, it proves that the sum is a loan and not a gift.

Drawn up as a private agreement (sous signature privée), it must state:

• the date;
• the full identity of the lender and the borrower (surname, first name, address, date and place of birth);
• the amount in figures and in words (in the event of a discrepancy, only the amount in words counts);
• the date on which repayment is due;
• the interest rate, if any;
• the borrower’s signature.

It can also be drawn up by a notaire (notary): the acte authentique (notarised deed) is directly enforceable, which allows the lender to have the defaulting borrower’s assets seized without first going to court (service-public.gouv.fr). The lender keeps the original until full repayment, then returns it or issues a receipt.

Declaring the loan above €5,000

Source: service-public.gouv.fr (fact sheet F1059). Official example: €3,500 lent in March 2025 and €3,000 in July 2025, i.e. €6,500, are declared in spring 2026. The declaration is primarily the borrower’s responsibility; the lender makes it if the borrower does not. It is free and, online, is made in the “Déclarations annexes” (additional declarations) section. You must state the date, amount, term, rate and repayment schedule, even for an interest-free loan.

Failing to declare, or a late or incorrect declaration, is penalised. Optionally, the contract can be registered with the service de l’enregistrement (the tax registration office) to give it a date certaine (a legally certain date): this formality costs €125 (service-public.gouv.fr).

With or without interest?

An interest-free loan is allowed. If interest is provided for, the rate must not exceed the taux de l’usure (usury rate, the legal maximum rate) (service-public.gouv.fr). The Banque de France publishes these thresholds every quarter; on 1 October 2026, they are for example 5.40% for fixed-rate property loans of 20 years or more, and 8.56% for household cash loans of more than €6,000 (up to €75,000), until 31 December 2026.

The loan itself is not taxed. But a lender who receives interest must declare it as revenus de capitaux mobiliers (investment income) (service-public.gouv.fr). For interest on fixed-income investments, service-public.gouv.fr gives an overall prélèvement forfaitaire unique (flat tax) rate of 31.4%: 12.8% income tax and 18.6% social contributions.

The risk of the loan being reclassified as a gift

The tax authorities can disregard transactions that are “fictitious in nature” in order to restore their true character (Tax Procedures Code, art. L64). A “loan” with no written document, no due date or never repaid therefore risks seeing the sum treated as a gift. And gifts of money are subject to gift tax (droits de donation) whatever their amount, after the allowance (service-public.gouv.fr).

Above that, the tax scale applies. Official example: a gift of €200,000 from a mother to her child leaves €100,000 taxable, i.e. €18,194 of tax (service-public.gouv.fr).

To limit this risk: a signed IOU, form 2062 if the threshold is crossed, a realistic repayment schedule and traceable repayments by bank transfer.

Lending or giving: the alternative of a tax-free gift

If the help is not meant to be repaid, a gift may be simpler. In addition to the €100,000 allowance, a don familial de somme d’argent (family gift of money) is exempt up to €31,865 if the donor is under 80 and the recipient is an adult (or emancipated minor) and their child, grandchild or great-grandchild, or failing that their nephew or niece. A temporary scheme also exempts, until 31 December 2026, family gifts intended to buy a new home or one bought off plan (VEFA) or to finance an energy renovation: €100,000 per donor and per recipient, €300,000 in total per recipient. The money must be used no later than the last day of the 6th month after the payment, and the home must remain a main residence or be let as one for 5 years (service-public.gouv.fr).

If the borrower does not repay

The lender first sends a mise en demeure (formal notice), preferably by registered letter with acknowledgement of receipt. Then, with a private agreement, they can instruct a commissaire de justice (judicial officer, formerly bailiff) to carry out a simplified recovery procedure if the debt does not exceed €5,000, or apply for an injonction de payer (court order for payment) above that. The claim becomes time-barred 5 years after the due date; the written document can provide for a period of between 1 and 10 years (service-public.gouv.fr).

Which professional to consult

The notaire (notary) can draw up the IOU as a notarised deed and advise on the choice between a loan and a gift. The courtier en crédit (mortgage broker) helps present the family loan in the financing plan submitted to the bank.