Buying Property with the French Leaseback Scheme
At Property Secrets, we have been reviewing investment opportunities in France for the last 18 months - and now with mortgages improving further, we feel this is the right time to invest in the French leaseback opportunities.
• Up to 104% mortgages...covering buying costs as well as purchase price.
• 19.6% tax rebate.
• 9 year rental agreement signed on completion
• Possibility to use the property yourself for up to 4 weeks a year
• Opportunities in ski resorts and city
What are French Leasebacks?
Investors buy the freehold of an off-plan property outright - so you own the property. As with all new properties, the purchase price includes VAT, however with a Leaseback property the VAT is refunded back to you. As VAT in France is 19.6%, this either replaces, or significantly reduces your deposit. The property is then leased back to a management company who specialise in the tourist management, maintenance and rental of these properties for a period of 9 - 12 years. In return, owners receive a guaranteed annual return which increases with inflation, irrespective of occupancy of the property, NET of all communal charges, maintenance and running costs.
The French leaseback scheme is a government initiative to encourage and promote both investment and tourism in France. It is a national scheme overseen by the French ministry of tourism and offers the assurance of government regulated contracts and financially bonded developers.
Under the leaseback scheme, the buyer agrees to lease the property back to a holiday management company for year round rental. Leaseback schemes are a popular way to purchase a property in France because they allow the purchaser an amount of personal occupancy whilst benefiting from an immediate saving on the purchase price. In most cases the annual rental income is guaranteed.
Due to the financial advantages, leaseback schemes have “mushroomed” in France.
The success of a leaseback development rests on two elements: its location and the long term performance of the rental management company. Hence the necessity to choose a location with good amenities and a good tourism track record.
The leaseback scheme serves a very specific purpose which is to promote and develop tourism. If you are looking for an investment opportunity without having to manage or maintain it yourself, then a leaseback property could be an ideal way for you to invest in French bricks and mortar. If you are a keen skier, or looking to combine an excellent investment opportunity, with a chance to enjoy a lifestyle break, this is an excellent opportunity!
And with the chance to secure mortgages at up to 104% of the purchase price, and the net rental income that can cover ongoing costs secured, it is also an opportunity that makes a huge amount of sense.
For more information on Property Secrets latest French leaseback deals - with opportunities in both the city and ski resorts and to download our FREE 7 part guide to property investing
- register your interest here
or call us on 0115 9853963.