French LEASEBACKS IMPORTANT INFO

[Tobias]

These are valid points however like everything it's all about the location at the end of the day. A front line beach leaseback like kaufman and braud are building in the south of France or 10 year old leaseback studios right next to 5 univesities will always produce interest from potential buyers. The leaseback system is 20 years old in France and has a proven track record. Just like any property there are the good and the bad ones. it all boils down to looking for key factors at the end of the day.

 

[ildkinvestments]

Hi

I have just joined this forum site.
I am a licensed French agent.
Some of the comments made in this post are correct.
BUT, there are various types of leaseback scheme within the French system.
They are all designed for French taxpayers.
However, the rules for LMNP/LMP products have just changed.
This scheme - LMNP/LMP - is the one where you get the TVA refunded (cashback). Previously, if the unit was sold off before 9 years, a proportion of the cashback had to be repaid.
THIS IS NO LONGER THE CASE.
You only have to keep the unit for 1 year, before you can resell it without penalty.
We deal in both new sales (to foreign clients) and resales (to french clients)
For LMNP/LMP, the standard guaranteed rental return (4-5%) appeals to French clients as this is higher than they would get in a French bank. However, most don't want to wait potentially 18-24 months to get their return after signing the intial paperwork to purchase.
Currently it is taking between 72-96 hours for us to resell LMNP/LMP products

 

[wayneaustin]

Has anybody heard of Leaseback agents being sued for

miss selling
miss representation

and actualy one their cases

 

[Cannes Flat]

I looked at leaseback before I purchased my apartment in Cannes. Not really a greta deal in terms of resale I think!

 

[odond]

Hi Guys, I think it is like everything else, some leasebacks are fabulous and some are really not so fabulous. You really need to look at the area the leaseback is in as some are in the middle of nowhere and difficult to sell, as a classic sale appartment in the middle of nowhere is hard to sell. A leaseback in Paris never stays on the market long. Location is everything.

Deirdre

 

[odond]

Hi

I have just joined this forum site.
I am a licensed French agent.
Some of the comments made in this post are correct.
BUT, there are various types of leaseback scheme within the French system.
They are all designed for French taxpayers.
However, the rules for LMNP/LMP products have just changed.
This scheme - LMNP/LMP - is the one where you get the TVA refunded (cashback). Previously, if the unit was sold off before 9 years, a proportion of the cashback had to be repaid.
THIS IS NO LONGER THE CASE.
You only have to keep the unit for 1 year, before you can resell it without penalty.
We deal in both new sales (to foreign clients) and resales (to french clients)
For LMNP/LMP, the standard guaranteed rental return (4-5%) appeals to French clients as this is higher than they would get in a French bank. However, most don't want to wait potentially 18-24 months to get their return after signing the intial paperwork to purchase.
Currently it is taking between 72-96 hours for us to resell LMNP/LMP products

Thanks for clearing these issues up, a lot of sites and articles are not up to date on this and even some promoters do not have the correct info.

Dee

 

[sheymoose]

There are some valid points in this thread but quite a lot of mis-information. The bottom line is if you sell a leaseback within the lease then you will make little profit and in the current market you will likely make a loss. You have to refuse renewal of the lease to sell it as a normal property and this will be subject to French commercial law, the particular lease agreement and the flexibility of the management company. But it is not the management company which sets the amount for compensation (if any is claimed),it is a French judge and it is loosely defined in French law as the amount for "loss of business". So the comment by Mr Howell referring to the Italian system is inaccurate. No one in the English speaking market knows more about the small print than I do, because we are the only company who provides a dedicated, open forum to discuss it (one that is used anyway). We make almost no sales any more even though we market properties (only one sale in 2009),because we do not missell. Our main interest in "staying in the business" is to provide information for leaseback owners or would be buyers and to provide help for people who are having problems:


Seamus McConville

 

[sextant]

French Leaseback

I don't agree with you.

We are based in London <snip>

We are very ethical at Sextant and we do not miss sell the Leaseback concept. It is a great concept very easy to understand, we are more than happy to explain the Leaseback contracts or to put the customers in touch with a solicitor so that there are no grey areas.

 

[sheymoose]

In that case I suggest you change some of your leaseback description e.g.
"You will get a fix rental normally linked to the inflation rate. So that every year you will see your rent rising according to the construction cost (INSEE Index of Construction Cost)."
"A property management company will take care of your home and for all maintenance and hassle (bills…) "
"After 15 years you can decide to sell it and to make a profit on the sale as the price of the property is most likely to increase"
"Note that if you keep the property in France for more than 15 years then you will not pay any capital gain taxes.
"
"If you take a Leaseback there is a method that allow you to not pay income taxes (the rent)."

Do you actually understand what you are selling?

 

[sextant]

French Leaseback

Actually Yes, I do know a lot about it as I am the managing Director of a successful established French property company.

You only quote parts of sentences from our website which is miss leading to other readers.

In addition, I don't think your post is professional as I would never criticise another property company (I didn't intend to offend you, I only wanted to point out certain facts, and that investors should choose Leaseback companies with a proven track record).

Scare tactics is not the right method. All our investment consultants are trained to provide honest and sincere advice to all our clients. For example we hold every <snip>2 weeks in our London office.

.

Bonne Année et bon vent pour 2010

 

[Kori]

Hi all,
I am a 1st time buyer and am looking into leaseback in a ski resort area and am very unsure now what is correct and what companies to trust.

As I am a novice to property investment overseas I would be greatfull if someone had the answers to a few queries I have:

1.How is the VAT return worked out? ie. Is this worked into the overall price of the property, making it cheaper or is it a refund in some way? Also what happens when you choose to sell, does the new investor get this same cash back?

2.Someone mentioned 4 main ('safe') management companies, does anyone know who these are?

3.How easy is it to sell? And what would be the rate of capital inflation in comparison to a normal ski chalet I were to buy?

I look forward to your replies.

 

[Penny Cooper]

Penny Cooper

Yes, what you said is true, before going to leaseback/agreements, its better to go through it and maintain a copy of the same ones. Normally no one prefers to maintain the copy but, its very important.