THE FRENCH LEASEBACK SCHEME ALLOWS YOU TO RENT OUT YOUR PROPERTY FURNISHED
and to combine the advantages
French leaseback scheme main objective is to generate extra income tax-free during working life for retirement. It enables you to purchase freehold a property which you then rent out to earn a guaranteed rental income from. When leaseback schemes are sold, there is a pre-selected property management company to whom you “leaseback” your property for a period which usually ranges between 9 and 12 years.
* Reduce your taxes
* Treat yourself to a quality secondary residence
* Establish an additional income tax-free
* Protect your family
* Occupy the property and save a budget accommodation during vacation in holiday resorts.
The FURNISHED RENTAL STATUS
The property management company is chosen before the development is made available for sale and the properties will then be sold on the condition of signing the commercial lease contract. The lease contract is prepared in advance and will be made available to purchasers at the same time as the reservation contracts for signing.
> Furnished rental status allows you to benefit from many advantages:
· tax reduction until 6000 euros per year if French Resident or Amortization Plan if non French Resident (in both cases you get tax incentives that boost your investment and allows you to invest in France tax-free or at a very low level).
· VAT recovery, or 19.6% – it is possible to buy tax – the VAT refund is made by the manufacturer of goods sold
· Guaranteed Rents net of expenses
· Security Management
· personal occupancy of your second home a few weeks per year tax exemption to combine pleasure and investment .
THE PRINCIPLES OF FRENCH LEASEBACK SCHEME
The tax reduction is calculated on the cost of housing chosen for its fraction below 300 000 € excl furniture. The amortization plan is computed on the full value of the property, without limitation.
The rate of tax reduction is 18% for homes purchased in 2011. That amounts to almost 1/5 of the property value returned to the investor in the form of a tax credit. Where housing is held in joint, each joint owner shall enjoy the tax reduction in the limit of its share of the cost.
The deduction is spread over nine years .
For new homes purchased in the future state of completion (“off-plan”) , it is given under the year of completion of housing or that of its acquisition , whichever is later, and charged on the tax due under that year then the tax for each of the following eight years at a rate of one ninth of its total amount under each of those years.
BENEFITS OF LEASEBACK SCHEME
The tax credit applies on the value of the investment up to 300,000 euros – beyond this limit it is possible to deduct amortization for a fraction of the cost of the property in excess of 300 000 € excl furniture.
Unlike Scellier Carrez-ordinary (classical residence) which is limited to one purchase per year, it is possible to buy several lots per year for the prospect of investing in holiday residence prusuant to the Leaseback Scheme status .
Rental income is subject to the regime of BIC – Industrial and Commercial Profits – which mean for non-residents the right to amortize the propertu on its full value.
The buyers recover VAT on the amount of investment (buildings and furniture): VAT at 19.6%. Exemption of capital gain from the 16th year.
Furthermore, the Leaseback status can be combined with another tax exemption scheme.
No geographical conditions rental the rental of the property is real estate related to the product itself (Tourist Residence) and not its location.
A commercial lease of 11 years guarantee your rents are indexed .
When the fraction of the tax reduction attributable to the title of a taxation year exceeds the tax payable by the taxpayer in respect of that year, the balance may be credited against the tax due for the following years until the sixth years. In other words, the reduction is spread over 9 years and up to 15 years if the reduction is greater than the tax paid.
The leaseback scheme applies from the taxation of income in the year 2011: can you reduce taxation of the current income year.