France Attractions

The French leaseback scheme was introduced in 1967 by the French Government because they felt that they needed to improve the accommodation for tourists at hot spots around the country, this in turn may also encourage more people to visit France. All the properties based in France that are under the leaseback scheme are considered tourism residences and are offered on a weekly basis to tourists that visit the area. These properties come with a lot of different extras that are also offered by hotels in the region. These may include a games room, jacuzzi, swimming pool and reception room, which adds to the total package, offered to the people staying at the property.

The leaseback scheme enables the buyer of the property to have full ownership of the property within a certain time period which normally runs from 9 months to 12 months. After this period of time is over the buyer has a choice of giving the property back to the business or renew the lease to continue the ownership over the next year. There are many different advantages to owning a property through leaseback. The main advantage is that investors in the property receive some rental income from the business. This can range from 2.5% to a larger 5% that allows the investor to receive some money back. Another advantage is the fact that buyers are allowed to retain VAT tax from the purchase of the property this is around 19% rather than the 17.5% from the UK and allows some money to be retained.

The management team will perform any maintenance that needs to be done on the property either due to damage or wear and tear whether it is inside or outside. This means that you do not pay for anything while you have leased the property during the year. The furnishings in the house will also depend on whether the buyer has bought the property with furnishings already installed. However, the buyer can offer a furniture package from the management that allows you to be able to stay in the property without any hassle. The last main advantage is that the property is not exposed to French capital gains tax after it has been under your ownership for 15 years.

At the moment, the French leaseback scheme is being mostly used by the French population, and many of the French population that buy the properties use it as an investment for their retirement plans in order to gain extra income. Increasingly, more and more people outside the country are becoming interested in buying through this method.

Some people from the UK have already taken advantage of the scheme and bought a property through French leaseback. Some people use the property for their own holidays but this has an affect on their rental income during the year as the weeks the owner spends in the property is a rental loss. The French properties that are under the scheme are usually situated in the coastal and mountainous regions across France such as Marseille and Nice.

Overall, the French leaseback market is getting more popular and is likely to see an influx of foreign buyers in the near future to add to their investment plans and this can only mean that the market is going to get bigger maybe with other countries introducing similar schemes to try and make tourism more popular in certain areas.

The UK property market is a sorry, unpredictable state - many properties have been repossessed and the numbers are rising, the market is unpredictable and who knows when it will stop shrinking? But there are ways of making a return on your investment in the property market without having a bit of a punt. One way is to look elsewhere, shun the UK and search further afield. Maybe even somewhere a bit exotic... OK, that may not eliminate the risk. What about just across the pond? That's right; France is the place to look to if you want to invest in property at the present time.

French leaseback is becoming increasingly popular with UK residents, mainly because it is straightforward and largely risk free, unlike investing in other parts of the world, even other EU countries. For a start there is much less red tape to slow the process down, which also saves on extortionate solicitors fees. In layman's terms a French leaseback property in essence is a freehold buy to let property which compares favorably with a buy to let property in the UK. Not just because of the location culture, and if you're lucky enough to purchase a property in the south of France, the sunnier climate, but because a French leaseback property offers the very tempting advantage of a full VAT rebate of 19.6 per cent on the purchase of the property.

A French leaseback property is also guaranteed to bring in a tax free rental income, so the occupancy concerns are eliminated and you will begin to recoup on your investment almost as soon as you sign the papers. Add to that the stability of the French housing market, especially in comparison to the UK property market. And where else would you invest your money at the moment? Do you really trust the UK banks? And even so, interest rates are at 1 per cent! That's a paltry return on your savings. And as for the stock market, that really is a gamble these days, even if you profess to know what you're doing. Wall Street is at its lowest for 12 years and who knows when this economic downturn will eventually come to a close.

The other advantage of buying a French leaseback property is that France is of course in the EU which means that UK citizens do not have to apply for visas or permits to visit, stay, live or work in France so effectively a French leaseback property could become your second home - a holiday home. And this is what many people are doing. By obtaining a French leaseback property you can let it for, say 9 months of the year and live in it for the remaining three months. The possibilities are endless and all with the minimum of fuss and risk.

As stated, you receive a guaranteed tax free rental income and a VAT cashback payment, plus there is the added benefit of the French banking system which is far more confident than in the UK given that banks in France have been much more responsible with their lending - no 100 per cent mortgages banded about as in the UK - resulting in a property market that is still resilient and healthy. And you do not even have to reside in France in order to own a French leaseback property. The pros very much outweigh the cons, so what are you waiting for? Utilise your idle savings straight away.