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Is leaseback like timeshare?
No. With leaseback schemes you purchase the freehold of
the property where with timeshare you are purchasing specific
periods of time in a property. Although you are leasing
back your property to the property management company for
a fixed period (normally 9 years) when the contract comes
to an end the property is still yours, unlike with timeshare.
Why is the VAT I receive back from the French government
less on a renovated property?
VAT on new buildings is 19.6% at present and on renovations
it is 5.5%. The VAT that will be reimbursed on renovated
property represents 5.5% on the part of the price that represents
the renovation work.
When will I receive my rental income?
This depends on the property management company and the
lease itself. Payments vary from quarterly to once a year.
If you have seen a leaseback scheme you are interested in,
and would like to know what the payment frequency will be,
please contact us.
Is it possible that my rental income can increase?
Again, this depends on the leaseback scheme you choose.
Generally, the % changes in annual returns are linked to
the INSEE index of Construction Costs which has increased
since 1953.
If I purchase leaseback, can I sell it?
Yes. As the freeholder of the property you are entitled
to do as you wish with your property. If you decided that
you wish to sell your property and capitalise on your investment
before the end of your lease contract, then the person to
whom you are selling would be obliged to see through the
remaining time on the lease contract. Eg. If you had a 9
year leaseback scheme and you wished to sell your property
after 5 years, then the new owner would be required to see
through the remaining 4 years of the lease.
If for example, the oven in my property broke, who would
organise and pay for repairing it?
Whilst you property is being leased back to the property
management company, they are responsible for the upkeep
and maintenance of your property. If you do not renew your
lease when it comes to an end, you will be responsible for
all maintenance and upkeep.
What is the process in buying a leaseback?
Because there is such a high demand for leaseback schemes
and the most profitable are snapped up very quick, it is
important to react quickly as to reduce the risk of losing
the property you wish to acquire. To secure your property
you must send 5 original signed documents to the developer
as soon as possible. In the majority of cases these are:
- the leaseback contract
- the reservation contract
- the technical description of the building
- the furniture list
- the floor plans
We will supply you with the documents and advise your of
the process you must follow. Whilst these documents are
being sent, you must transfer your deposit to the French
Notaire (notary) and send proof of this transfer to the
developer. This will then secure the property for you until
you are able to complete by signing the "Compromis de Vente"
at the notaries office (nb.there are other ways of signing
the Compromis de vente if you do not wish to go to France.)
The developers are obliged by law to allow you up to two
months before completing so that you may find funding for
your project.
What happens to my deposit?
Your deposit is transferred to the notary's bank account.
The notary is independent of the developer and all French
notaries bank accounts are held at the "Caisse des depots
et consignation". Deposits should only be transferred to
notaries holding an account here as they are strictly regulated
and the money cannot be given to the developer until completion.
Where is it best for me to take out a mortgage UK or
France?
With fluctuating exchange rates between the Euro and Sterling
it is advisable to seek advice on the best solution available
to you. It is generally worth considering obtaining a French
mortgage as the interest rates are lower than in the UK
and the yield you will be obtaining from your investment
will be in Euros. To find out more about French mortgages
please contact us.
Who pays the bills during the leaseback period?
During the leaseback period the property management company
are responsible for paying the bills relating to your property.
There are, however, two taxes in France that relate to your
property, one of which you will be required to pay as the
owner of the property. This is the local taxe foncière and
represents a reasonably small amount per year of around
300€ although this does vary depending on location and the
size of your property. The other tax, is the taxe d'habitation
and this is paid by the property management company.
What happens if I wish to go on holiday in my property?
This depends on the leaseback scheme you have chosen, but
providing your scheme allows some personal occupation you
are entitled to holiday in your property as detailed in
your lease contract. The time you can stay in your property
during the lease varies, but generally the maximum time
is 8 weeks per year. The majority of the property management
companies insist that you notify them if you wish to reside
in your property in advance before a certain date so that
they can avoid double booking.
Can I use the property out of season?
Yes, normally although this depends on the scheme, however
there may sometimes be a small administration charge to
pay.
What happens when the lease contract runs out?
Because you are the owner of the property you may do what
you want with it at the end of the leaseback scheme. You
can live in it, sell it, rent it privately or renegotiate
or renew your leaseback scheme with the property manager.
Leaseback
properties in France
What is a
leasback property?
To find out more about French leaseback schemes please email
us or call us now on 0845 2000 467
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