French property now more attractive

 

French real estate has become even more attractive with recent changes in the way French Leaseback property is taxed on its sale. Changes in French law now remove the necessity to pay VAT on French Leaseback properties when they are sold making this type of French property an attractive overseas property investment.

 

The Leaseback System is a scheme which was introduced by the French government in 1976 to boost the tourist industry in different parts of France. The French government was concerned about the slow French housing market and a slow down in tourism in certain areas of France. The leaseback property buying system was introduced to counteract these problems. Leaseback developments were originally in the less popular areas of France but the scheme has greatly expanded since those days

 

Before the introduction of the new French property law, the payment of VAT on the new property - currently 19.6% - was waived but, if the property was sold prior to completion of the 11-year term, the vendor was obliged to pay a proportion of the VAT back to the state. The investor is no longer required to repay any VAT at all when selling the apartment, even if he or she re-sells within the first five years of ownership. The only condition is that the residence must be ‘classified’ with an official tourism star rating

 

The French property market was brought into the fore by allegations of greed and advantageous property deals as Ségolène Royal was accused of underestimating the value of her French Riviera holiday home to minimise her tax bill.

 

 

Ms Royal the first woman with a chance of becoming French president faced down the charges, saying she had been "transparent" over her property portfolio. The tax authorities would have intervened if there were grounds for concern, she said

 

Property in France