THE FRENCH LEASEBACK SCHEME

Leaseback properties in France are a popular way of investing for those who would like to have a holiday home and at the same time receive a return on their (potential) long-term investment. You can buy different kinds of properties under a leaseback agreement, for example leaseback apartments, ski chalets, villas or houses.

When you decide to buy a leaseback property in France, the property will be leased back to the developer or another property management agency. This means that you are the freehold owner of the leaseback; however, the management company will maintain and rent out your property. In return you will receive a guaranteed income from the management company, even when your leaseback apartment or ski chalet is not rented the entire season. Additional to the guaranteed return on your French leaseback property, you will also be able to use your leaseback for a certain amount of weeks a year. Usually the number of weeks lies between two and six if the personal usage option has been chosen. Some developments also give an option without personal usage: which would make it a pure leaseback investment.

The location of the leaseback property investments in France is very important as this partly determines the rate of guaranteed income you receive. The locations of French leaseback properties are usually very attractive such as sought-after ski-areas in the Alps, where leaseback ski chalets are common, and coastal locations such as Côte d’Azur or Bordeaux with leaseback apartments or villas. Paris has remained a popular destination for many tourists; therefore leaseback apartments are in high demand in France’s capital.

A leaseback agreement in France usually lasts for 9 to 11 years. After that period you have different options: you can renew the lease with the management company, you can sell the property or you can decide to live in the property yourself.

The French leaseback scheme, ‘Residence the Tourisme’ scheme, originates from 1986 when it was set-up by the French government in order to promote tourism in France. Tourism is one of the main sources of income of France and there still is a shortage of tourist accommodation, especially during high season.