Ashton Graham Solicitors Look at Leaseback in France
Summary
On the basis that there is an exemption to TVA (French VAT) of 19.6%, and if the buyer takes out an 80% mortgage he will not then need to add any more funds other than the fee to the notaire (the lawyer in France), of about 3% of the price.They may perhaps offer a lower yield than could be produced by renting a property directly, but there is much less work involved, so for a long-term investments it can be easier to manage.On the basis that there is an exemption to TVA (French VAT) of 19.6%, and if the buyer takes out an 80% mortgage he will not then need to add any more funds other than the fee to the notaire (the lawyer in France), of about 3% of the price.In such instances there is no person who would have capacity to rent the property.Furthermore, the French government is prepared to offer the exemption to TVA on the basis that at least 80% of the properties in the whole development is let out to holidaymakers.If the investor - the landlord in the rental agreement - were to terminate the lease, then he may be obliged to indemnify the tenant company.Overall, leaseback arrangements can be attractive.