Choose leasebacks to avoid proposed new tax on second homes in France say experts
The news of a proposed 20% tax on second homes in France owned by non French residents has caused some concern for potential property buyers in recent days; however experts advise that leaseback properties which, as part of the French government program established in the late 1960s, are rented out for a set period each year, will avoid this equivalent of a second tax.
Charlie Williams, Business Development Manager at Terresens, one of France’s leading eco-friendly leaseback developers, comments,
“The proposed changes by the French government to the taxation of non-French resident property owners which if passed will come into force from January 1st 2012 appear very popularist proposals to win votes in an election year. They do not attract foreign investment, may conflict with EU principles and therefore may well not be agreed.
“Potential property buyers should not be put off buying in France as leaseback properties, by their very nature, will be exempt from this proposed new tax.”
Highly respected property lawyer, David Anderson from Sykes Anderson LLP, echoes this advice, saying,
“If the property is rented and so not freely available to the owner the tax will not apply. This means leasebacks will not be affected.”
Leasebacks have risen in popularity in recent years compared to classic second home purchases in France due to the security they offer. Leaseback purchases offer owners the best of both worlds, freehold ownership of a property in France, guaranteed rental income (index linked) derived from the lease of the property to an appointed management company as well as personal usage throughout the year. In addition VAT is refunded, a considerable saving of 19.6% for buyers.
As Charlie Williams explains,
“France will remain one of, if not the most popular choice for second property abroad with Brits and indeed many other nations. Leasebacks offer a safe, secure and hassle-free way of owning a home in France and its exemption from this proposed new tax is further evidence of the program’s merit.”
For more information about the proposed new tax and buying leaseback property in France contact Terresens today on +44 (0) 2074 714 681 or visit www.terresensleaseback.com.