ADVANTAGES OF THE FRENCH LEASEBACK SCHEME

There are many benefits of French leaseback property investments. The most important reason why people decide to invest in a leaseback property in France is the combination of a return on your investment and the personal usage of the property. However, there are more attractive advantages that the French leaseback scheme offers to property investors.

First of all, the buyer will receive a refund of the 19.6% VAT on new builds. You can expect to receive your VAT back within four to six months after the completion of construction. However, if you were to sell your property within 20 years of purchase, you will have to pay back a proportional part of the initial refund of the VAT to the French government. Sometimes the developer pays the VAT in advance, making the leaseback investment scheme even more attractive.

On a French leaseback property the deposit is usually lower than on a resale property, the rates being respectively 5% and 10%. The notary fees for new properties (between 3% and 4%) are also lower than those for resale properties (between 6% and 8%). Furthermore, as the owner of a leaseback property in France you are exempt from the Tax Foncière (land tax) for two years.

Because the management company maintains and manages your property, you will be able to enjoy a hassle-free French leaseback investment. Additional to this, most of the leaseback developments are sold completely furnished in a complex where services and facilities are readily available during the season. The management company is also responsible for the daily management of your property, therefore you do not have to worry about leaving your leaseback apartment, ski chalet, house or villa unattended for months.

The personal usage differs from one French leaseback development to another. Normally you can choose a number of weeks (usually between 2 and 6 weeks) depending on the season. A pure investments option without personal usage is usually available too. Generally speaking the lower the personal usage, the higher the guaranteed income you receive on your French leaseback, which is usually between 3% and 5.5% a year. The guaranteed income also depends on other factors such as location. If you would like have more weeks at your leaseback property, the management company usually offers a discounted rate.