CELA REAL ESTATE INVESTMENT PROGRAMS
The CELA Hotels – Resorts – Spas group proposes T2 and T3 apartments to buy within the French law of tourism residence.
The apartments are located on :
- The Sierra Residence, Malibu Village, in Canet in Roussillon, Eastern Pyrenees, South of France
- The Cela Alenya Residence, in Alenya, Eastern Pyrenees, South of France, near the beach and the golf club of Saint Cyprien.
The advantages of this investment :
5.25 % including :
Annual rental income (4 % from the excluding tax sale amount of the apt )
Annual credit holiday (1.25 % from the excluding tax sale amount of the apt )
11 years guaranteed renting
VAT refund
THE FRENCH LEASEBACK SCHEME
Background..
Introduced by the French government in 1976 as a way to increase revenue from tourism, this scheme has been extremely successful and continues to be so. The problem is a shortage of holiday accommodation at peak times, and France derives a significant share of its Gross Domestic Product from tourism.
The intention of the Leaseback Scheme is to increase the supply of holiday and business rental accommodation in some regions by giving tax breaks to developers for building “Residence de Tourisme” schemes. This includes the “Residence de Tourisme d’Affaires” classification, which translates as “Business Travel”. Every “Résidence de Tourisme” enjoys from a specific planning permission and classification given by French Authorities.
Purchase Discount
New build property in France is subject to 19.6 % VAT but under this scheme, if you buy “off plan”, you are able to have this refund by the government.
The government takes anything from 3 – 4 months to process this refund.
The Lease
You buy the property freehold, so it is yours from the outset, then lease it back for a fixed period (11 years) to a management company who let it out as holiday and business accommodation. The same management company is appointed for the whole development.
The lease contains an agreement to a guaranteed (fixed) rental which the company will pay to you, normally quarterly in arrears. There are provisions for this to increase periodically, in line with the INSEE Cost of Construction Index published by the French government. In practice this translates into a 6 % (approximately) increase every 3 years.
The management company is responsible for all property outgoings during the lease period, including maintenance of the building and furnishings, which means that the rent you receive is a true net figure; there is nothing for you to pay except your mortgage, a small ‘land tax’ (local rates of €300-350 a year, waived for the first two years), insurance (about 150 € per year) and the fees for an accountant to complete your annual tax return. This latter is a legal requirement and also costs about 300€ a year.
A Long-Term Investment
The French Leaseback Scheme is ideal as a long-term investment. If you renew the initial lease, you have a 22 year period of guaranteed returns which should be long enough, at Euro interest rates, to clear a repayment mortgage in its entirety. You therefore end up with a property which you own outright and which, apart from your initial deposit, has been paid for by someone else.
It is a long-term investment which is entirely guaranteed from beginning to end offering a good return, increasing regularly and paid partially by the return.
informations : +33 (0)4 68 73 65 39
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