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French Leaseback - a Great Way to Buy Your Ski Property in France

Find out how French leasebacks work and where great leaseback property can be found in France

French leaseback system - who is it for?

If you're serious about buying a property in France, then you may have heard of the French leaseback system. Introduced by the government in 1976, it tends to exist more in some areas of the country than others, with the Alps being at the head of the list. Leaseback won't suit everybody, of course. For a start, the property you are interested in has to be part of a leaseback scheme. And, leaseback won't be for you if you want to live in the property for extensive periods every year, as there are restrictions on your usage when you buy in this way. It's also essential that the property is set in the popular tourist areas of France, or the rental income won't be sufficient. So it's no good if you want to bury yourself in the depths of undiscovered rural France. Leaseback is, however, worth some serious thought if you want a property in a ski resort to use for a few weeks holiday every year, and you want a good, guaranteed rental income to help cover your buying costs.

What is a French leaseback?

To clarify, a leaseback scheme works like this. You agree, when buying your property, to lease it back to the developer or to the letting agency for an agreed period of time. The minimum period for this lease is nine years, so take this into account before entering into any agreement. At the same time, you will agree a number of weeks in each year when you will have exclusive use of the property for yourself. Your usage is free, with no rent payable to the agent. The agent will then be free to rent out the property to others for the periods when you are not in residence. You will receive a fixed fee in rental payments, helping you to cover the cost of any mortgage you have had to take out to make the initial purchase. Once the nine years has elapsed you can choose to renew your agreement with the agent and continue in the same way (good if you are happy to keep your investment and rental income and still only need to use the property occasionally) or you can end the agreement. If you end the agreement you then have the choice of keeping the property as your own. If you keep it you are free to do what you want with it, which means living in it full-time, using it as often as you want, or letting it out to others. Or, you can choose to sell it. Of course, if you still have a mortgage on the property you may need to keep renting it out to help meet the repayments.

Advantages of French leasebacks

There are a lot of advantages to buying a property in France through leaseback. You get a top quality property with a guaranteed rental income for the agreed period. You have up to six weeks every year for your own use of the property. And, you don't have to deal with the people who rent the property or clean up after them. All this is done by the letting agency. As the agent will be keen to keep the property rented out, it is less likely to be broken into than a property that stands empty for any length of time. New build properties in France carry tax advantages too, reducing costs of buying even further.

Disadvantages of French leasebacks

There are a few things on the downside too though. You really are restricted to the agreed periods for your own use, so you need to plan your holidays in advance and stick to your dates. If you decide to end the agreement after nine years, the agency has the right to some compensation. Capital Gains Tax may apply if you sell the property. It is classed as a second home and thus subject to the new French CGT rules. And, should you sell the property as a non leaseback property or keep it for your own exclusive use before the end of twenty years, you do have to pay back any tax discount that you received on purchase. And be aware that if your development is sold to another developer/agent, they have the right to negotiate a different deal with regard to rental income. If this deal is not as advantageous to you, you have the choice to sell but you can't insist on a return to the original, higher rate of income.

Leaseback properties are popular in ski resorts in France

Leaseback properties are usually new or bought off plan. The build and finish quality is always exceptional. If you find older properties offered on a leaseback scheme, the property will have been scrupulously maintained and offered in prime condition. Apartments are common. There are lots available in the French Alpine resorts. Ski resorts make ideal locations for leaseback property of course, as most people only spend a few weeks a year in their ski properties. There are a lot of resorts in the Alps, though, so it can be hard to decide exactly where to begin a search. To get you started, here are three Alpine locations that are ideal for leaseback schemes.

Sainte Foy - a traditional Alpine village with attractive leaseback property

Sainte Foy, or to give it its full title, Sainte Foy Tarantaise, is a delightful small ski resort that's part of the Savoie department. It's ideal for you if you love the look and charm of traditional Alpine villages. Many people think that leaseback properties are only situated amongst concrete blocks, but this doesn't always have to be the case. Sainte Foy has plenty of heritage and its peaceful and oh so pretty. Leaseback properties in Sainte Foy are available at the time of writing from not much more than 200,000 Euros.

Tignes - its long ski season is a great advantage for leaseback buyers

Tignes is the place for serious skiers. It's also brilliant for leaseback property owners as its high altitude means it has a longer ski season than anywhere else in the region. Tignes is almost always the first ski resort to open each year, and last to close. So if your leaseback agreement means you can't have much high season usage of your property, Tignes is perfect! Property on leaseback scheme in Tignes can be again found from just over 200,000 Euros, surprisingly little for such a great resort.

Chatel - a picturesque and well equipped ski resort

A third suggestion for where to look for leaseback property is Chatel. Close to the border with Switzerland, Chatel is picturesque and packed with Savoyard traditions and architecture. It's a great base for skiing and for many other sports, and it's got all the shops, services and restaurants that make Alpine holidays so enjoyable. Leaseback property in Chatel goes for around 220,000 Euros.

How French Property Links can help you find your leaseback property

French Property Links and its sister French language site are able to offer not only advice on buying leaseback property and financing your purchase, but also have extensive lists of the best leaseback properties currently on the market in France. Coming in at the top of Google searches, French Property Links works with private sellers and established estate agents in France, whose local knowledge is second to none. There's a great selection of properties, reasonable rates for advertising and prices are displayed in either Pounds or Euros so you get a clear idea of the price.

French Property Links - English version

Agent Immobilier France - French version

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