Our Leaseback Investment Service

We are experts in leaseback investment, having brought the concept to the UK 10 years ago. For those who do not plan to holiday in France at all, or only for a few weeks each year, a leaseback investment is the ideal, affordable option.

We work with a wide range of leaseback developers to provide the best and most complete choice of properties possible for our clients. We do not accept any leaseback from any developer that approaches us. If we do not market a property that you have been considering, it will probably be because we have carried out our due diligence and have decided not to take on that particular scheme.

What is Leaseback?

Leaseback is a unique scheme developed by the French government more than 20 years ago to encourage good quality development in tourist areas.  Investors buy a brand new freehold property and, at the same time, sign a commercial lease contract with a property management company who will rent it for a pre-determined, renewable period of around normally 9 or 11 years. This company will generally factor in a couple of weeks personal use by the investor of the property in this lease. The management company, highly experienced in the tourist industry, will agree to pay a set amount of rent per annum for the use of the property. This income is index-linked which protects the investor from inflation.

The rental income produced from the property is enough to cover all of the running costs of the property plus some, or all, of the mortgage (depending on the size of mortgage taken). The mortgages available for this type of purchase are extremely attractive with loan to values of typically 80-100% of the purchase price and interest rates starting from typically 2.4%.

Leaseback investments are always either off-plan, new-build or renovated properties which means that investors benefit from all of the advantages of having a newly constructed or renovated property. See our New-Build Property Lowdown article for more information on these advantages.

As the French government needs more tourist accommodation to support its huge tourist trade, leaseback investors are awarded a 16.4% tax relief. This is because if you buy a newly-built or renovated leaseback property you do not have to pay the VAT that is normally applied to new property purchases. This is a considerable discount off the market value of the property.

PS. Some property advisers talk of a 19.6% discount, call us to find out why it’s really 16.4%! Unlike most brand new properties in France, leaseback investments come with kitchens and furniture already installed and part of the price. At the end of the lease period, the property will be returned to the owner in perfect condition.  Some leases include the right for the management company to renew the lease period for a further 9 years, excellent for buyers who are looking for income generation for the long term.

The benefits

• Freehold property ownership – you own the property, no-one else
• The property is looked after when you are not there
• The property makes an income when you are not using it
• Fully managed = completely hassle free
• The tax advantage = 16.4% reduction in price through VAT rebate
• The income is a regular, guaranteed sum = typically 2.5-5% per year
• No rental management costs to pay during the lease
• No maintenance costs to pay for during the lease
• No taxe d’habitation to pay
• No or reduced taxe fonciere for two years
• No furniture or kitchen to install or pay for
• Lower insurance costs (as the management company pay the majority of the insurance)
• Lower purchase costs (the legal costs are reduced because it is a brand new property)

Some leaseback schemes offer a ‘pure investment’ option for investors who are not interested in using the property themselves. The guaranteed rent paid is higher if you do not opt to use the property during the lease. The property is then let out full time to either tourists or on a short let basis to business travellers.  

To find your perfect, no-hassle, and affordable holiday home, view our full list of leaseback properties.