Britain's overseas homebuyers have long had a love affair with France. Increasingly, thanks to a French government scheme called Residence du Tourisme, UK buyers are finding their dream home comes with cash back.
Introduced in the mid-eighties by the French government, the "leaseback" scheme entitles the owner of a qualifying property-ask the estate agent, to a guaranteed rental income, exemption from VAT (currently 19.6% of the purchase price), and use of the property for a limited period each year, ranging from 1 to 6 weeks but generally no longer. The scheme has proven to be an ideal scenario for many Britons who use their second home for only a few weeks each year.
While adopted nationwide, naturally the scheme has proven most popular in France's major tourism areas. Cidric Ricci of French estate agents Conseil Patrimoine has seen the growth of "leaseback" on the Cote d'Azur.
In Nice, for example, despite three new build apartment blocks being accepted as Residence du Tourisme there are still not enough properties to meet the demand for rented accommodation," said Ricci, "Hence the reason why there is so much confidence in "leaseback" from foreign buyers and French developers alike."
Confidence, of course, is a key element to continued investment. "France has a stable capital growth history and is continuing that steady pattern. Most developments under "leaseback" are offering around a 5-6% return and an average capital growth of approximately 10% a year," said Ricci.
Credit: VHF
Types of property available through leaseback, some older as well as new properties qualify, and more generally in France, vary from farmhouses to restored manor houses, from brand new city apartments to imposing chateaux. Both new and old French properties have much to offer, but as each to his own it is important to know what is suitable in terms of budget, location, holiday or permanent home as well as in stylistic preference.
Consider also practical issues. For example, many homes will require central heating to be installed, particularly in rural areas, such as Limousin, where it is still possible to buy an unrenovated farmhouse for as little as €20,000 (£13,000). Alternatively, for those who wish to be close to sporting facilities, such as a ski resort or golf course, new build homes are often better located for amenities, including airports, making them popular for those looking for a weekend holiday home.
