FiveOClockNews.net

The France investment property industry has remained stable despite the global recession and has continued to attract investors and second home buyers alike. One of the reasons for this is because of the Leaseback scheme.

France is with out a doubt the most visited holiday destination in the world. With the ever increasing growth of the tourism industry, the requirement for rental properties is always high with a lack of quality accommodation to satisfy the demand.

Because of this, the governmemt in France launched the French Leaseback property scheme in 1986. The scheme aims to satisfy the ever-increasing demand for rental properties by the tourists and especially in the popular locations like the Alps which has a very high demand for good property like 5 star French ski property for example.

The concept behind the leaseback program is relatively simple: a buyer purchases a property and then hands it over to the management company to rent it for a specified specific period of time (normally 9 – 18 years, or 9 years renewable) in exchange for a guaranteed rent within that specific period of time. The investor also has the advantage of a specified amount of usage from the property themselves, normally a few weeks a year out of season.

French Leaseback Property has two types:

1. The property is rented without the furniture, which is called “murs nus”. It is the responsibility of the property management company to put the furnitureinside the property.

2. “Loueur Meuble” which means that the property is fully furnished at the time it was rented by the management company.

Not all properties can be qualified for a leaseback as the government in France have set out specific standards for the materials and constructions used in the property. Therefore investors can be sure of the quality of the properties they are buying and holiday makers can be sure of the quality of there accommodation.

Another benefit for leaseback investors is that when the French Leaseback property has been contracted for 20 years of rent, the investor is entitled to a tax refund of value added tax paid within six months after the actual date of purchase.

Another great benefit with French Leaseback property is that the management company must maintain the healthy condition of the property and if there is a need for repairs and maintenance, they are responsible and will cover the costs.