To make the right choice and select the best investment opportunity to match your personal needs, we should look at the so called " "Leaseback Scheme". Leaseback properties were introduced by the French government in 1986 to enhance local tourism in certain areas of France. Before we go any further, you should note that leaseback properties are not timeshare properties. The purchase is always on a freehold basis. For more information please go to the sales process and your exit strategy THE STATUS The Investment must be a fully furnished accommodation. As it is not considered as a business, there is no registration to the "Registre du Commerce et des Societes" (Equivalent to Companies House in the UK) At the end of the year, the rental income received must be declared under the "BIC" tax system to the French Authorities. This is often done on your behalf by a designated accountancy firm. VAT CASH BACK STATUS The residence must provide services or has to be classified as a tourism development. You sign a Commercial Lease Contract for at least 9 years with a management company offering the following four Hotel/Catering services: Reception, Maintenance & cleaning of the residence, Breakfast and provision of household linen. The rent is subject to 5.5% VAT and paid per quarter. To claim the VAT from the French Authorities, you must receive at least three month rent from the management Company. Three to six month later, you will receive a cheque that can be used to: Repay part of the Loan, purchase a life savings plan (for Interest only Mortgage called In Fine) or keep the VAT . TAX ADVANTAGES Every year, instead of being taxed on all of the rental income, you can deduct: ► The Mortgage Interests ► The Condominium Charges ► The Notary's and Mortgage fees ► The depreciation value (Amortisation) of the property over 30 years ► The depreciation value (Amortisation) of the Furniture over 5 years As the deductions are higher then the annual rental income, there will be no income tax to pay. The difference can be carried forward for a maximum of five years. Leaseback Properties fall under two main categories: 1- The Leisure sector 2- The Serviced sector 1- THE LEISURE SECTOR COMBINES Ski, Seaside, Countryside resorts and City developments: - Holiday resorts offers private villas, terraced houses, flats or duplex - Hotel type residences provides studios to 2 bedrooms apartments Some developments will provide many services like swimming pools, sauna, gym, restaurant, bar, Ski locker room, reception area, laundry & Linen services Internal or external car park and private garages. SO WHY INVEST AND BUY A LEISURE LEASEBACK PROPERTY? If you don't want to get involved with the renovation and maintenance of a property, find a tenant, pay for excessive management fees, leave the property empty and open to burglary, clean the property when you leave then a Leaseback property is an ideal alternative to classic purchase. Most Leaseback schemes will offer 2 to 3 weeks of personal use. The rest of the year, the management company will give you a guaranteed rental income and look after your property, so you really buy a property with peace of mind, security and trouble free. You also look at an investment for the future i.e. a top up pension for example 2- THE SERVICED INDUSTRY COMBINES Student, Business and Medical Residences. From studios to 2 bed flats, the student apartments are available on a half term basis. Business residences are type of Apart Hotels. Properties are usually managed by specialised companies offering medium to long term occupancy. Some will provide services like Gym, Sauna, conference room, Breakfast area, bicycle rooms and Inside/outside car park facilities. Serviced Leaseback Properties are becoming extremely popular in France as they offer flexibility, long term occupancy and full privacy for the occupant. They tend to be cheaper than traditional hotel rooms. There is normally no self occupancy with serviced leaseback properties. SO WHY INVEST AND BUY IN A SERVICED LEASEBACK PROPERTY? Serviced Leaseback properties are pure investment products. You can use it as a top up pension, as an alternative to traditional bank savings accounts, as a saving plan for the children education or simply create an affordable property portfolio for you and your dependants. The Management Company will pay you an index-linked guaranteed rental income and your lease contract can be renewed automatically after the first term of 9 to 12 years. So as long as the company is happy to lease your property, you will potentially receive a guaranteed income for the next 20 years and have your capital protected against inflation. Overall, serviced Leaseback Properties should be bought as a long term income provider and also can be highly regarded as an alternative to pension funding for risk free investors. Once the property is paid off, you will receive a guaranteed rental income. The indexation is based on the construction or rental index (details can be found on www.insee.fr) The leaseback scheme is extremely regulated in France and offers many tax advantages. So if you want to start saving for the future and get maximum reward, property prices can start as low as €55000 / £35000. ex of VAT. Act now while it is still available. For a free tailormade approach please call us 0203 371 9796