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How Does It Work Buying Process Financial Projection Taxes FAQ
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Frequently Asked Questions |
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Q. What is the tax break on the leaseback scheme?
A. The VAT, If you buy a property in a classified residence of tourism, the French government allow a refund of the VAT (19.6%) to the buyer.
A. Income tax break, in most of case you will not have to pay income tax on your net rental income received, contact us for details.
A. If you invest over €450,000 you will also obtain a tax break on capital gain at the time you resale the property (if you own for minimum 5 years).
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Q. Can I finance my property via a French bank?
A. That will all depend of your financial situation; the bank will request that you have no more than 30% of your income going to debt payment (mortgage, car loan, etc.). They will ask: income tax papers, salary slips, bank statement, etc.
Usually you will be able to finance your property at 50% up to 90% depend of your citizenship and financial situation interest rate are about 5%.
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Q. Who will look after my property and what guarantees do I have that it will be well maintained?
A. The management company run and manage all of their Residences. Because of the standards required by the minister of tourism (government organization) that inspect the property every year, each individual property and commune area (pool, reception, etc.) must be maintained in perfect order.
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Q. What are my guarantees and If the management company goes bankrupt?
A. The management companies we select are very strong financially and old enough to show large references. The management companies manage 100’s and for some 1000’s of properties.
A. First your ownership in the property will not be affected. Either a new management company will take over or you can rent your property privately.
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Q. What happens at the end of the 9/11-year lease?
A. As the freehold owner you can choose to sell, use or rent out your property whenever you wish. Alternatively you can renew the lease with the management company. With the latter option, the terms of the lease will be discussed (duration, weeks of use, rental income, service charges …)
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Q. Does the Leaseback scheme work in the same way as time-share?
A. With time-share all you are purchasing are periods of time, which you can use within a given number of locations over a set term. Once the term has expired you own nothing. Under Leaseback you are the freehold owner of the property from day one and all you have done is entered into a 9/11-year lease.
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Q. Who pays the bills during the 11 years?
A. The management company pays for the upkeep and maintenance of your apartment along with all the utility bills. You would still have to pay the "Taxe foncière" and your accountant.
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Q. Will I get the use of my own apartment?
A. This situation depend on the residence you choose, most of the time you have a package that offer 3 weeks use at 3,5% rental income. Also more you use your property more the rental income decrease. In some case you also have the right to use your weeks on other resorts (ski, countryside, seaside)
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Q. What happens if I need to sell before the end of the 9/11-year term?
A. As you are the freehold owner you can sell whenever you choose, but you would be selling the property with whatever period is remaining of the lease.
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