The leaseback scheme in France enables people to buy their holiday home or an investment property in France and to finance most of the mortgage costs with a guaranteed rental income (typically yielding 3-7% of your initial investment) from a secure management company who then rent out your property for the period of the lease, typically 9 years. The big advantage is that the French government give you back the VAT which is paid on the new development, this is currently 19.6% of the price. But do your sums correctly, if the selling price is 200,000 euro then the price on which the VAT was calculated is 172,200 euro. You will get back 32,800 euro which is 16.4% of the price you paid. In other words you get back about one sixth of the total VAT inclusive price not one fifth. In some cases the buying price you are quoted is with the tax already recovered by the contractor.
You are the freehold owner of the property and you can have use of the property for holidays for selected weeks of the year, this depends on each specific leaseback scheme. The property is purchased furnished and fitted with kitchen and bathroom. Your property is fully managed and serviced by a property company who lease from you and you have no further costs or charges for the period of the leaseback. You own the freehold. Most leaseback plans give you the use for several weeks of the year and you receive a fixed rental income guaranteed for the rest of the year. The VAT tax incentive is a real discount off the market value of the property giving a VAT refund on the whole property from the French government. The current rate of VAT on all new property is 19.6%.(this refund represents a 16.4% discount of the market value normal selling price)
