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The French Leaseback Scheme Is Taking Off

Aug 12, 2008
The French leaseback scheme was introduced in 1967 by the French Government because they felt that they needed to improve the accommodation for tourists at hot spots around the country, this in turn may also encourage more people to visit France.

All the properties based in France that are under the leaseback scheme are considered tourism residences and are offered on a weekly basis to tourists that visit the area. These properties come with a lot of different extras that are also offered by hotels in the region. These may include a games room, jacuzzi, swimming pool and reception room, which adds to the total package, offered to the people staying at the property.

The leaseback scheme enables the buyer of the property to have full ownership of the property within a certain time period which normally runs from 9 months to 12 months. After this period of time is over the buyer has a choice of giving the property back to the business or renew the lease to continue the ownership over the next year.

There are many different advantages to owning a property through leaseback. The main advantage is that investors in the property receive some rental income from the business. This can range from 2.5% to a larger 5% that allows the investor to receive some money back. Another advantage is the fact that buyers are allowed to retain VAT tax from the purchase of the property this is around 19% rather than the 17.5% from the UK and allows some money to be retained.

The management team will perform any maintenance that needs to be done on the property either due to damage or wear and tear whether it is inside or outside. This means that you do not pay for anything while you have leased the property during the year. The furnishings in the house will also depend on whether the buyer has bought the property with furnishings already installed. However, the buyer can offer a furniture package from the management that allows you to be able to stay in the property without any hassle. The last main advantage is that the property is not exposed to French capital gains tax after it has been under your ownership for 15 years.

At the moment, the French leaseback scheme is being mostly used by the French population, and many of the French population that buy the properties use it as an investment for their retirement plans in order to gain extra income. Increasingly, more and more people outside the country are becoming interested in buying through this method.

Some people from the UK have already taken advantage of the scheme and bought a property through French leaseback. Some people use the property for their own holidays but this has an affect on their rental income during the year as the weeks the owner spends in the property is a rental loss. The French properties that are under the scheme are usually situated in the coastal and mountainous regions across France such as Marseille and Nice.

Overall, the French leaseback market is getting more popular and is likely to see an influx of foreign buyers in the near future to add to their investment plans and this can only mean that the market is going to get bigger maybe with other countries introducing similar schemes to try and make tourism more popular in certain areas.
About the Author
Property expert Catherine Harvey looks at the advantages of buying property under the French leaseback scheme and what benefits it has to those who are not French nationals.
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