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How Property Leaseback In France Saved Me Money
When I first looked into acquiring a holiday home last year a great deal of timeshare options came my way but with the myriad of horror stories I've heard about timeshare scams I was reluctant to follow that path. I considered buying outright - it was expensive, but it seemed like the best option until a friend suggested looking into a leaseback property in France. On first glance, it seemed like it would be similar to a timeshare; I don't permanently live in the property but get time there every year, however a quick bit of research put my mind at rest.
Sale and lease back is when an asset - usually property or a similar fixed asset - is purchased and is leased to the seller. This means that they are able to continue using it but no longer own it, providing the seller with the money from selling it, but without losing the use of it. In France, the leaseback process has been popular with new properties for many years, largely due to the law there which is designed to encourage letting. The government discounts the 19.6 percent tax which is to be paid on any new build on the agreement that the party leasing the property will pay 5.5 percent tax which, over a 20 year period will match the initial saving.
At its core, this meant that I would buy (or at least mortgage) my holiday home from the developer or letting agent and they would lease it back from me. I would be the owner, but they would be responsible for its upkeep and when I wasn't using the property, they would find occupants for it. In order to qualify for the leaseback scheme, I would only be allowed to live there for six months of the year but since I was intending this to be a holiday home I wasn't too concerned about this issue.
With the lease money from the letting agents hopefully covering most of the monthly outlay for the mortgage that I would be paying, I was far less concerned about the financial side of things than I would have been if I were simply mortgaging the house to use it for just a few weeks every year. It really was sounding like an excellent approach to purchasing my holiday home and it was becoming easy to see why property leaseback in France was such a popular option.
After some further research, I found a good agent who fully and clearly explained the process to me; the pros and cons, what I would need to do and what they would do for me and it really became apparent that this was something I could be happy with.
The mortgage outlay after the lease money comes back is an easily manageable payment which saves me a lot of money over purchasing outright and not leasing back and I thoroughly enjoy my holidays there every year which is really the main concern for me.
About the Author Thomas Pretty is journalist who has just leased back a holiday home. Find out more about leaseback in France at http://www.premierfrenchleaseback.com/
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