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French Leaseback Properties For Sale

Lease back often referred to as leaseback properties are a safe way to invest in property in France.

With a minimum of risk, guaranteed rental income and no property management headaches, where else can you find a good investment opportunity that even lets you use the property so many weeks each year?

With prices of leaseback properties starting from around £40,000 and mortgage funding available for up to 80% of the purchase price, this can prove to be an ideal alternative from the UK buy to let scene.

You can view over 150+ lease back properties in our database at any given time.


What is Leaseback Property?

Leaseback property has been around for two decades in France, and was introduced by the French government to increase the quantity of quality holiday accommodation available in areas capable of attracting more tourists.

With the downturn in pensions and other more traditional methods of investing, more and more people are turning to bricks and mortar, and leaseback schemes have helped take the hassle out of owning buy to let property.

The leaseback scheme enables you to purchase freehold a property which you then earn a guaranteed rental income from. When leaseback schemes are sold, there is a pre-selectionned property management company to whom you "leaseback" your property for a period which usually ranges between 9 and 11 years.

During the period you leaseback your property to the property management company, you have the peace of mind of owning property and benefiting from a guaranteed income, yet none of the hassle related to letting out and maintaining the property! This is one of the reasons why the leaseback scheme is so popular and that there is not enough supply to meet demand.

You can usually use your property for a certain number of weeks per year for holidays although this differs from scheme to scheme.

The guaranteed rental income tends to range between 2.5% and 6% per annum depending on the property, whether you will be taking your holidays in it and where it is located. Different property management firms offer different rental incomes, but in general the less you use your property the higher your yield will be. This is normal when you think about it, as the property management firm cannot guarantee to pay you rental income if you are always in your property!

What's more, the French government agrees to offset the payable VAT (TVA) on the purchase price against that charged to the short let customers of the rental management company. This means that you will receive back a sum equivalent to the VAT on the property at the rate of 19.6 % on new build property. This normally takes some months to come through, but some developers will advance the VAT for the government and reclaim it back directly.


French Leaseback Properties

  • 1 bed Apartment

    Alps - France
    1

    Ref: 2011603 Brand new 4-star residence with panoramic south facing views in Vallorcine; some apartments can be bought under leaseback scheme: Reserve your property now to avoid disappointment! OU...

  • 1 bed Apartment

    Alps - France
    1

    Ref: 1011609 Guaranteed return & occupancy stays in Vallorcine brand new 4-star residence; some apartments can be bought outright: Reserve your property now to avoid disappointment! OUTRIGHT OR ...

  • 0 bed Apartment

    Alps - France
    0

    Ref: 1011609 Guaranteed return & occupancy stays in Vallorcine brand new 4-star residence; some apartments can be bought outright: Reserve your property now to avoid disappointment! OUTRIGHT OR ...

  • 1 bed Apartment

    Alps - France
    1

    Ref: 1011608 Brand new 4-star residence with guaranteed return & occupancy stays in Flaine; some apartments can be bought outright: Reserve your property now to avoid disappointment! OUTRIGHT OR...

  • 2 bed Apartment

    Cote D`Azur - France
    2

    Ref: 1004036 Short Description An exceptional site where is located this 4-star residence offering breathtaking views on the Baie des Anges and the snow-capped mountains of the Southern Alps... The...

View All Leasebacks in France


Frequently Asked Questions

Is leaseback like timeshare?
No. With leaseback schemes you purchase the freehold of the property where with timeshare you are purchasing specific periods of time in a property. Although you are leasing back your property to the property management company for a fixed period (normally 9 years) when the contract comes to an end the property is still yours, unlike with timeshare.

Why is the VAT I receive back from the French government less on a renovated property?
VAT on new buildings is 19.6% at present and on renovations it is 5.5%. The VAT that will be reimbursed on renovated property represents 5.5% on the part of the price that represents the renovation work.

When will I receive my rental income?
This depends on the property management company and the lease itself. Payments vary from quarterly to once a year. If you have seen a leaseback scheme you are interested in, and would like to know what the payment frequency will be, please contact us.

Is it possible that my rental income can increase?
Again, this depends on the leaseback scheme you choose. Generally, the % changes in annual returns are linked to the INSEE index of Construction Costs which has increased since 1953.

If I purchase leaseback, can I sell it?
Yes. As the freeholder of the property you are entitled to do as you wish with your property. If you decided that you wish to sell your property and capitalise on your investment before the end of your lease contract, then the person to whom you are selling would be obliged to see through the remaining time on the lease contract. Eg. If you had a 9 year leaseback scheme and you wished to sell your property after 5 years, then the new owner would be required to see through the remaining 4 years of the lease.

If for example, the oven in my property broke, who would organise and pay for repairing it?
Whilst you property is being leased back to the property management company, they are responsible for the upkeep and maintenance of your property. If you do not renew your lease when it comes to an end, you will be responsible for all maintenance and upkeep.

What is the process in buying a leaseback?
Because there is such a high demand for leaseback schemes and the most profitable are snapped up very quick, it is important to react quickly as to reduce the risk of losing the property you wish to acquire. To secure your property you must send 5 original signed documents to the developer as soon as possible. In the majority of cases these are:

  • the leaseback contract
  • the reservation contract
  • the technical description of the building
  • the furniture list
  • the floor plans

We will supply you with the documents and advise your of the process you must follow. Whilst these documents are being sent, you must transfer your deposit to the French Notaire (notary) and send proof of this transfer to the developer. This will then secure the property for you until you are able to complete by signing the "Compromis de Vente" at the notaries office (nb.there are other ways of signing the Compromis de vente if you do not wish to go to France.)

The developers are obliged by law to allow you up to two months before completing so that you may find funding for your project.

What happens to my deposit?
Your deposit is transferred to the notary's bank account. The notary is independent of the developer and all French notaries bank accounts are held at the "Caisse des depots et consignation". Deposits should only be transferred to notaries holding an account here as they are strictly regulated and the money cannot be given to the developer until completion.

Where is it best for me to take out a mortgage UK or France?
With fluctuating exchange rates between the Euro and Sterling it is advisable to seek advice on the best solution available to you. It is generally worth considering obtaining a French mortgage as the interest rates are lower than in the UK and the yield you will be obtaining from your investment will be in Euros. To find out more about French mortgages please contact us.

Who pays the bills during the leaseback period?
During the leaseback period the property management company are responsible for paying the bills relating to your property. There are, however, two taxes in France that relate to your property, one of which you will be required to pay as the owner of the property. This is the local taxe foncière and represents a reasonably small amount per year of around 300€ although this does vary depending on location and the size of your property. The other tax, is the taxe d'habitation and this is paid by the property management company.

What happens if I wish to go on holiday in my property?
This depends on the leaseback scheme you have chosen, but providing your scheme allows some personal occupation you are entitled to holiday in your property as detailed in your lease contract. The time you can stay in your property during the lease varies, but generally the maximum time is 8 weeks per year. The majority of the property management companies insist that you notify them if you wish to reside in your property in advance before a certain date so that they can avoid double booking.

Can I use the property out of season?
Yes, normally although this depends on the scheme, however there may sometimes be a small administration charge to pay.

What happens when the lease contract runs out?
Because you are the owner of the property you may do what you want with it at the end of the leaseback scheme. You can live in it, sell it, rent it privately or renegotiate or renew your leaseback scheme with the property manager.



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