- Real Estate
The French Leasback Program: Let the French Government Pay You to Live in France
Escape to the French Countryside and Pay Less in Taxes
The French Government wants you to buy a
house in France and they have gone to extravagant lengths to prove it. France is the number one tourist destination world wide. They had almost
73 million visitors last year alone. In order for the country to keep up with the demand for tourist accommodations they created something called the “Leaseback program.” What that means is that various Developers around the country build their rental properties, and then offer them for sale completely free of VAT (almost 20% in France. In other words, you could buy a property that normally costs $100,000 for around $80,000). The government will also guarantee you easy financing of up to 95% of the purchase price with fixed interest rates of 5% to 6%. All in all, a very good deal!
What’s the catch? Well, you are the rightful owner of the property but you must agree to turn it over to a property management company who will then lease it out for a set number of years (usually just under a decade). BUT, after management and operating costs have been deducted you are still guaranteed a net return
on your rental of about 4.5% (you will have to check with the management company for exact percentages and number of years, etc.—they all vary slightly). This return can be free of French tax and is also indexed for the cost of construction. What that means is your return could actually increase over the term of the leaseback.
You have to think of this as more of a vacation home investment because during the time the property management
company is leasing your home, you are only eligible to use it 2 to 4 weeks out of the year (depending on the management companies policies). The upside is, you have a guaranteed rental income (even if it’s never rented) and (albeit, limited) use of the property.
If you have ever dreamed of someday living in France you should take advantage of this extraordinary offer. You save on taxes. Financing is almost a certainty and you have a guaranteed rental income. Plus, you have use of the property from the start. Once the lease is up, you can either start all over again (for the rental income) or move in!
For more information on how this whole thing really works go to French Real Estate and
click on their “investment schemes” button. This is an excellent site
with load of pictures to make you “ooh” and “ah.” Be sure to click here to see a break down of investment vs. income and how that works out in your monthly payments.
If you’re really serious about moving to
France then you’ll need to know all the legal “oui’s” and “non’s”. While there is no mention of the “leaseback program” France-Spain.com
is still a comprehensive site for those considering a move to Southern
France or Spain. It covers a wide range of topics from health insurance
to visas as well as legal issues and questions.
To set your heart a flutter we’ve included a link to the largest listing of French properties in English on the web. French Property News
Article by Anne Alexander Sieder