Commercial Investments

In essence leaseback properties are residential properties that are grouped together and run as a tourist hotel.  The project has to comply with a whole series of regulations in order to qualify, properties that do qualify benefit from a tax advantage.

Last year (2006) 76 million people visited France, there’s also a huge amount of internal tourism.  The demand for tourist accommodation is extremely high.

The leaseback system was created by the French government in order to encourage foreign investors to build tourist accommodation in France.  Leaseback schemes have operated successfully in France for more than two decades.

Leaseback – How it works

Development has to be approved by the residence de tourisme project

Investor purchases a unit in the development
Title to your unit is registered in your name
The development is run as a hotel, individual rooms rented out to tourists.  (Rooms must be rented for at least 6months of the year)
You grant a lease of your unit to the hotel operator (Lease period 9yrs) the hotel rent out your apartment to tourists, the hotel pay your rent
The hotel company will pay all costs associated with running the property (accept from a small amount of local property tax which is approx €75 - €250 per year)
The hotel owner will let you use your property if it is available (this will just be deducted from your rent for this period)
You will be taxed on rental income; however you will be entitled to tax deductions if you have a substantial mortgage on your property

Benefts of leaseback

Low Risk & Guaranteed Rental

For the first year all costs are covered
2nd year and those thereafter – 2% (of price paid for the property) guaranteed as rent, however – unlike other leaseback schemes, the income is variable allowing for higher yields.  Each investor will get a share of the pooled income earned by the hotel. We estimate it will be approx 7% (of the price paid for the property).
The French government fastidiously scrutinize these projects insuring a high level of quality and amenities that tourists will find appealing.  This offers the buyer an added degree of safety.

Low Entry Cost & Easy Financing

Low 5% deposit
Low Taxation
As a financial incentive, the French government is offering you to buy the property free of TVA (sales tax).  This constitutes a 19.6% discount off the regular price.
High loan to value mortgages (often up to 90%)
Mortgage rates in France are very low typically 5% -5.25%
We will work out the best mortgage option for you in an attempt ensure
Your rental return covers your payments.

No Hassle

You do not need to visit France to invest; everything can be organised from the UK. 
Your investment property will be managed for you by the worldwide hotel group. 
Rental income is being generated by a reputable, worldwide hotel chain, rather than individual tourists

Capital Growth Potential

The French Government would not authorise the development if they did not foresee a profit generated by tourism.
The company responsible for transforming Val D’isere into the resort it is today have invested €50million in the resort of Serre Chevalier.  Prices of property in Val D’isere have risen to between €9,000 to €15,000 per sq/m.  At present property in the Serre Chevalier is priced between €4,000 and €5,500 per sq/m; excellent room for growth.
Rental returns are index linked and so they increase each year with inflation.
Your return is evaluated each year based on an annual valuation mandated by law.

Please feel free to call Commercial Investments anytime between the hours of 9am to 6pm Monday to Friday on the below number:

0870 383 0404

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