Table of Contents
What is a French leaseback?
The leaseback is a commercial lease under which a French property owner rents his furnished holiday accommodation out through a professional holiday residence management company.
What is a leaseback apartment in France?
A leaseback property transaction is the purchase of a freehold furnished property in a serviced residential building. Buyers own the freehold of the property, which is then leased back to a management company for a period of 20 years – this is usually split in to two terms and the minimum lease agreement is nine years.
Is French leaseback a good idea?
French leaseback is ideal for working people who can spend but a few weeks in holidays per year but still want to draw a revenue from their French property without the hassle of doing the renting themselves.
What is a French leaseback property?
What is a French Leaseback property? The leaseback scheme was set up by the French government in 1986 to encourage investment into tourist destinations in France such as the French Alps, South of France and some major cities.
What is the VAT on a leaseback purchase in France?
Buyers of leaseback are entitled to a refund on the 20% VAT due on a property purchase in France. In most cases the developer will advance the 20% VAT for the buyer when the purchase completes which means the buyer doesn’t pay the VAT usually due making the purchase considerably cheaper.
What are the most common misconceptions about the leaseback scheme?
Another misconception of the leaseback scheme is that, when selling your property, you must repay the VAT back to the French government. This is simply not the case – the new owner will take on any VAT responsibility for the property.
Can you sell a leaseback property?
You can sell your leaseback property and, providing the new owner takes on the commercial contract and continues to use it as a leaseback you don’t have to pay any VAT. If they don’t continue the lease then you will be liable for 1/20th of the VAT due for every year still left on the contract. What are the advantages of leaseback?