Print Posted By Lost in France on 31 Aug 2006 in French Property - Buying French Property

Buying French Leaseback

Buying French Leaseback French leaseback is term to used describe a method of buying property that is unique to France. The process was developed in the 1970's by the French government in a bid to encourage tourist development in some areas.

French leaseback works by allowing purchasers to buy freehold properties while at the same time signing a lease with a property management company who will then rent the property out for short term holiday rentals for a renewable period. This period is normally around 11 years. The management company are responsible for all expenses related to the property such as running costs, electricity, water etc.

In return for their investment the purchaser receives special tax concessions such as 0% VAT on the purchase price and a guaranteed income from the property for the duration of the lease. It is normal for lease back contracts to allow the purchaser to occupy the property for around 1 month each year. After the lease has expired the purchaser is free to do what ever he wants with the property - move in or sell it on.

It is also possible (subject to conditions) to buy leaseback using a UK pension fund. For some this is an ideal investment as it allows you to live in the UK, receive an income form your purchase while enjoying four weeks holiday each year in your property.

As with all investments and property purchase it is essential to take independent legal and financial advice before entering in to any contract.

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