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This is the second phase of development and comprises 52 two bed properties arranged in 26 chalets and located at the foot of a 5 hectare lake. Facilities on the site include a restaurant, swimming pool and solarium. The cottages are 58 m2 and priced at 152,000 euros. The yield is 3% with three weeks free personal use, or 4% without occupation.
What is Leaseback?
• Guaranteed index linked income
• Refund of VAT currently 19.6%
• Established developer
• Fully furnished
The Leaseback scheme was established in France in 1976. It is open to non-residents and is becoming increasingly popular in the UK as either a pure investment with a guaranteed income, as a holiday home option, or both.
The scheme works by purchasing a freehold property which is then leased back to the developer or a management company. Under the leaseback scheme the French government refunds the VAT of the property (currently 19.6%).
The purchaser can also enjoy periods of usage through the year, depending upon the terms of the lease. The developer or management company is responsible for all the maintenance of the property including the maintenance of furnishings which are typically included in the purchase price. The developer is responsible for insuring the building and contents. It also pays for many of the local taxes and all the utility costs.
The owner is then guaranteed a rental income. The net return is index linked annually to construction costs. Tax allowances apply in respect of interest payments, legal expenses etc. If the property is held for 15 years there is no French Capital Gains Tax.
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