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Leasebacks

Leasebacks have just got better with some important French TAX changes – more of that later. With a French Leaseback, you buy a property – typically in a ski, beach or golf development – and receive back the local tax (TVA). TVA is levied at 19.6% in France. As well as this substantial perk, you received a guaranteed rental income for initially 9 to 11 years.

How much does the Property Price appreciate?

Here are some examples provided by the biggest leaseback developer in France:

1 bedroom Meribel apartment bought in 2003, appreciated in value 118.3% when sold in 2006.

1 bedroom Coudalere apartment bought in 2004, appreciated in value 97.4% when sold in 2006.

Of course, we cannot guarantee such high levels of growth on future purchases

SIPPS

Another big tax perk for UK buyers is the benefit of buying a leaseback within your SIPP. Many of our developments are classed as “commercial” and can be included. We have leasebacks in France and Spain that can be included in SIPPs.TAX BENEFIT
There has been recent clarification of a new French law regarding VAT and leasebacks. Upon the sale of a leaseback property, owners now no longer have to repay the VAT pro rate temporis as long as the new buyer continues with the lease agreement – the new buyer does not therefore have VAT to pay either.

OUR TOP TIP

CENTER PARCS

Lac de l’Ailette, the first Center Parcs Europe Domain developed by the Pierre & Vacances Group, opens in July 2007.

The new generation Center Parcs is in a league of its own – with high quality furnishing, LCD screens, private terraces and three different types of Cottages.

We expect reservations to be snapped up fast – please contact us if you wish to reserve.

Sebastian Jay
PropertyMagnate.com – Leaseback Investments
tel: + 44 (0)1525 635191

The French Alps in the Eastern provinces of Savoie and Haute Savoie are among the most popular ski destinations in Europe. Every year hundreds of thousands of ski tourists descend on the French alpine ski resorts that border Switzerland and Italy to enjoy the snow, sun and to marvel at the fabulous French scenery.

Visitors to the French Alps tend to hire accommodation to suit their purposes. While some tourists select ski resort hotels for their holidays, others decide to rent apartments and ski chalets close to the ski lifts.

Ski-in / ski-out accommodation is preferred by many. This allows skiers to ski up to the front door of the French property they have hired, avoiding the need to take their skis off and trudge through the snow and ice to get back to where they are staying.

I have to admit here that I am a fan of the French Alps ski scene. In the past few years I have visited several ski resorts in France. My favourites are Meribel, which is a very picturesque village with wooden ski chalets overlooking a spectacular alpine valley, and Courchevel 1850 – one of the most prestigious ski resorts in the world.

A lot of people I have met on the French ski slopes have talked to me about their desire to buy French property in one of the ski resorts. For most it is only a pipe dream – they see the property prices in the windows of real estate agents in the ski resorts and immediately declare that they cannot afford to buy property there.

Yet, if they were to dig a little deeper; if they researched the French property market they would find that a ski property is in truth affordable, and would make for a very good property investment indeed.

Property investing in the French ski resorts

Ski resorts in France, by their very nature, are big tourist draws. Many ski resorts – like Meribel, Courchevel and Val d Isere – offer summer alpine activities as well as winter sports, making them all-year-round holiday destinations. It is here where the vast potential for investment in French apartments and chalets in the Alps starts to become apparent, as it is possible (with the right type of marketing behind you) to rent out French property under your ownership to tourists for the entire year.
Imagine the amount of rental income you could receive from such a property investment!

Sceptics of course will point out that achieving a high level of tenant occupation is rather difficult. The majority of French property owners simply do not have the resources to market their property efficiently and obtain the necessary bookings.

In answer, there is another way! Buy French leaseback property:

In the 1970s the French government introduced an investment concept in France. Called the French leaseback scheme it encouraged overseas property investors to buy French property in France’s popular tourist areas and then lease the property back to a tourist management company for a period of several years. The tourist management company would take on the responsibility of renting the property out and obtaining rental bookings for the property. As part of the lease agreement the management company would pay the French property owner a guaranteed percentage of the rental income received.

Today, french property leasebacks continue to grow in popularity. They offer property investors the opportunity to buy freehold property in French ski resorts, and receive a guaranteed income from the property for the life of the lease, which is normally between 8 – 11 years. Property owners can also elect to have built into the lease plan a clause that allows them to use the ski property themselves for anywhere between 2 and 6 weeks of the year. It is basically like having a holiday home in France that you can use, but having the security of a world class tourist management company that pays you for the use of the property for the rest of the year. It’s a perfect property investment!

French leaseback rental yields

As I’ve mentioned, rental income from French property leaseback acquisitions are guaranteed by the management company, courtesy of the French government’s involvement. Rental yields are generally between 2% and 5% depending on the type of rental lease program chosen, and subject to how many weeks of personal use are required from the ski property.

Some of the best leaseback property purchase opportunities in the French Alps at the moment are in the Three Valleys area (Trois Vallees).The Trois Vallees is a massive ski domain that offers hundreds of kilometres of ski runs and cross country skiing tracks. It is possible to ski between the different winter resorts in the Three Valleys – something that makes the area very popular with tourists who want to try out the different ski runs in other alpine villages. If you are keen on the idea of trekking through the snow to other alpine resorts it is always best to take a map of the french alps and a compass with you. Getting lost in the snow if a blizzard sweeps in across the French alps is not a pleasant experience!

Top ski investment spots in the Three Valleys include Meribel Mottaret

Meribel is a very beautiful place to enjoy a winter break and to own ski property. One-bed ski apartments on a French leaseback deal are available from around 380,000 euros. Currently, at les Crets ski residence there is a west-facing 6th floor apartment of 54m2 living space + 8.3m2 balcony. It sleeps 5-7 people and is priced at 382,255 euros excluding VAT without furniture or parking. With furniture and parking the price is 402,257 euros excluding VAT. Rental income of up to 19,000 euros is guaranteed as part of the French leaseback scheme.

Meribel Leaseback < < more info
Les Menuires

Courchevel 1850

Looking for a French leaseback investment in a luxury ski location? The Chalets du Forum lease back residence could be your dream come true. In the heart of one of the most prestigious ski resorts in Europe the Chalets du Forum offers luxury ski apartments in chalet-style wood and stone buildings. Prices for the luxury lease back apartments start at around 500,000 euros. Rental income is guaranteed at 4%.

Courchevel < < more info

Buying ski property in the French Alps is a good investment decision. If you play your cards right with your property loan or mortgage you could be enjoying positive cash flow from your French property leaseback investments for many years to come. 

There are growing signs that property prices across Europe have peaked. In the UK the latest reports indicated house prices are in decline in Great Britain. Meanwhile in Europe, the emerging markets in the East such as Bulgaria, Turkey, etc. are not showing the house price inflation of 2005. In fact, many experts are not recommending Bulgaria any more…..

So in troubled times – where do you turn? One market that continues to expand is the Leaseback market in France. Briefly, leaseback offers purchasing a new property with the local tax (19.6%) refunded AND a guaranteed rental income for initally for 9 to 11 years (more details on the French leaseback scheme).

The rental income is typically in the range of 3 to 6% per annum (on the purchase price). With mortgage rates less than 4%, this is a very attractive proposition.

In addition, of course, there is the expectation of capital growth.

The leasebacks are located in tourist locations and are available across all regions of France.

Are you looking for a solid investment property? Then French Leasebacks are for you! This a 20 year investment in holiday accommodation in France with tax incentives and guaranteed rental incomes.

This type of investment is a product of the French Government looking for a solution to holiday accommodation shortages in tourist areas. The French Government’s initiative has produced a large market for this type of property with developments in many areas of France including Paris, Brittany, the Mediterranean coast and ski resorts. The French have been significant investors and the market has been open to international investors for many years. The success can be measured by the increasing number of developments coming to the market. Some ski resorts have been sold out within a week of launch.

How does it work? There are two elements – the purchase and the lease for rental. To encourage the purchase of these properties, the French government will refund the 19.6% TVA (tax) – so you are effectively buying at a discount from day 1. On the rental side, you are agreeing to lease the property back for rental. The management company will offer you a guaranteed rental on the property for typically a 9 or 11 year period – after the initial period you can re-negotiate the rental terms. Usually, the guaranteed rental incomes are between 4 and 6% of the purchase price per annum. Often the rental company will let you occupy the property for 2 to 6 weeks per annum as well. The personal use varies according to each development. Properties are sold furnished and maintained in excellent condition by a management company during the lease term.

Does this sound attractive? Well, the financing is also exceptional. On some developments there are 100% mortgages available depending on your personal circumstances. We have many mortgage brokers offering 80% financing on French Leasebacks. With Euro mortgage rates at around 3% – although there is a current upward trend – your rental income will cover the mortgage payments.

And there is more…..there are tax advantages and reduced notary fees for new property. Most of the leasebacks offer high quality services and are ranked from one to four stars – the higher rank the better the services offered in the resort.

On 1st-for-French-Leasebacks.co.uk we have over 100 developments across France. In particular, we would recommend Provence leasebacks, and the Ski Resorts but we have developments in many major centres including Paris, Bordeaux, and somewhat further afield the beautiful island of Corsica. There is a complete explanation on our web site including a breakdown of costs and payment schedules.

In summary, a government backed initiative with 19.6% TVA refund and guaranteed rental income. At this stage it is impossible to predict capital growth on the property price – suffice to say, many of these developments are in prime locations.

For more information – click here >> French Leaseback

Sun, sea, white beaches, a relaxing atmosphere, tasty food and a lovely glass of wine whilst watching the beautiful French sunset. Or how about visiting the mountains and their white slopes? What else could you possibly desire?

After a few weeks, you would have to desert you own holiday home, leaving it vacant and idle. If only there were a solution for this so you could enjoy your holidays and, when returning home, turning it into a profitable investment.

A leaseback offers this possibility and a number of other advantages. Originating from 1976, the French leaseback scheme is an attractive option for (potential) long-term, property investors. Set up by the French government forty years ago, it was an initiative to promote tourism in France.

One of the advantages of the scheme is that you are exempt of the 19.6% VAT charge normally applying to new properties. You would be able to use your property approximately four weeks a year. However, there are also plenty of developments where you could stay for a longer period for time. Another benefit is the guaranteed income of 3% to 5.5%. A management company looks after your property in your absence, making it a stress- and hassle-free investment for you.

For an example of such an investment – follow this link:

Click here >> Leaseback Investment

Farida Vidal EUPP