Living The Dream With French Leaseback
Owning a holiday home in another country is the dream for many of us; it allows us
to get away from it all whenever we like, and it allows us to do this in familiar surroundings, meaning that we get to relax as soon as we get on our holiday rather than taking the time to settle in that usually happens in unfamiliar places.However, buying or mortgaging a property in another country can be both an expensive and complex process and with the current economic landscape being what it is, this is an investment for many of us that we can't quite afford or justify. That said, it is still possible thanks to the French leaseback scheme which has been implemented by the country's government.
Essentially, the French leaseback scheme works by you purchasing the property from an individual or group - usually the property developer - and they then lease it back from you, meaning that they still have use of it, but you are the outright owner of it. This allows you usage of the property while also giving the developer or original owner the opportunity to use it themselves. It will also likely cover your mortgage payments, meaning that you will most likely cover all of your outgoings, making French leaseback an excellent way to have access to a holiday home in France while saving a great deal of money compared to simply mortgaging the property or buying outright.
Though the French leaseback scheme entitles you to be the main owner of your property and provides an encouraging tax break for the developers; if they build properties with the scheme in mind, it saves them the 19.6% VAT that must typically be paid on new builds, however there are concessions which you must make as the owner for the property to be included in this scheme. You must keep the property in the program until this VAT discount has been paid off, which usually takes nine or 11 years, and this will usually automatically renew for another nine years, meaning that it is in the scheme for 18-20 years which will typically be until the mortgage is paid off.
Although you won't be able to simply use the property whenever you feel like it under the French leaseback scheme, and you aren't able to live in the home all year round, it is the cheapest and easiest way to acquire a holiday home in France, and is one of the most secure ways of investing in property in the foreign marketplace, regardless of the economic climate.
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