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French
investment new build property developments in Languedoc, South France
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French
new build property developments are booming in Languedoc, South France,
as property buyers from all over Europe are descending on this region of
France looking for excellent property investments. Languedoc is currently
a paradise for new builds and property developments, as property prices
have risen faster here than in any other French region over the last 10
years. But it's not just the property investment opportunities that make
Languedoc in the south of France a superb place to buy property on new
build developments, the region itself is probably the best reason to invest
in property here.
Property
developments in the 'New' South of France
People buying
new build properties in Languedoc's many new property developments are
investing in more than just bricks and mortar. They're investing in a way
of life - the chance to buy property in Languedoc, the 'new' South of France,
an unspoilt French region that is a world away from the over-built-up nouveau-riche
glam of the Cote d'Azure and Provence.
Languedoc-Roussillon,
despite the many property developments popping up all over the region,
is still relatively wild and under-populated, with huge expanses of beautiful
vineyards and 'garrigue' (herby scrub) stretching from long Mediterranean
beaches to the mountains of the Pyrenees and Cevennes.
The food is
excellent, (Europe's best oysters and shellfish come from here) and the
region now produces some of France's best wines. So property development
investments here allow buyers to experience the south of France as it used
to be, without having to pay bloated Provencal prices. 10 Reasons why
property developments in Languedoc-Roussillon represent a better investment.
You'll find
property development opportunities all over Europe, and the world. But
new build investments in Languedoc, south France, offer many advantages
over those in other areas of France, and Europe.
1. France,
and especially the South of France, has a chaché that continues
to make property here popular with wealthy buyers.
2.
The French government's adroit handling of urban development (unlike in
Spain, where development goes largely unchecked, ruining traditional villages
and scarring the coast), means that property developments in Languedoc
won't one day lose their value due to over-building or the erosion of the
local culture.
3. The
French government's tight control over what is build where by developers
also means property developments in Languedoc are better built and more
interesting architecturally.
4. The
Languedoc region is booming, with more people moving to it than any other
region of France. Property values, which are still low compared to Provence,
are rising faster than any other French region.
5. Excellent
roads: the A9 coastal motorway is about to be doubled in width, and the
new A75 motorway means there are now three major routes to the Languedoc
region of south France.
6. More
flights: budget flights to the region continue to soar, with flights to
Montpellier, Nimes, Carcassonne, Perpignan - and soon - Beziers.
7. Improved
train links: Languedoc's high-speed TGV train links are excellent, and
the new TGV line from Barcelona, which is about to open, will bring even
more wealthy visitors and property investors from northern Spain.
8. Larger
beaches than the Cote d'Azure and Provence, coupled with access to the
Pyrenees and Cevennes mountains, make Languedoc the perfect place to invest
in a second home - as it can be used in both summer and winter.
9. New
build property, located in developments in Languedoc, can easily be rented
out, as tourist numbers to the region continue to rise. Many property developers
also manage these lettings.
10.
France's generous leaseback schemes mean you can buy houses in property
developments in Languedoc, south France, very tax-efficiently.
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Leaseback
schemes - the tax efficient way to invest in new build property developments
in France.
The French
Leaseback scheme in Languedoc offers property investors an alternative
to buying property the traditional way with some added incentives. This
unique scheme allows investors to buy their dream home in Languedoc (usually
a new build property in Languedoc in a property development) by ensuring
that a proportion (or all) of the mortgage costs will be covered by a guaranteed
rental income. With no French VAT (which is currently 19.6%) charged on
Leaseback schemes in Languedoc, this type of investment can be an attractive
option.
Where did
Leaseback schemes come from?
The French
government recognised that there was a significant shortage of rental property
available - especially in the popular region of Languedoc-Roussillon. This
was exacerbated by the fact that many holiday homes are often left empty
by their owners, who didn't want, or couldn't, rent them out to holiday
makers or short-term tenants.
As France
is still the world’s top tourist destination, something had to be done
to create an incentive for companies to build quality property developments
in regions such as Languedoc that not only cater to the modern tourist’s
needs, but that also help to support the local economy by achieving high
house occupancy through-out the year.
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Is A Good Idea |
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| So they created
the 'Residence de Tourisme' scheme. This allowed certain property developments
to offer ‘Leaseback’ schemes, encouraging investors to buy new houses in
such developments.
So how does
it work?
Essentially,
you buy the freehold of a Languedoc holiday home, be it a new-build apartment,
a chalet, a cabin or a house. This could be part of a larger property development
complex with the benefit of central facilities like a spa, gym, pool or
even a golf course.
Each unit is
sold furnished, and the new-build's owner leases it back to either the
developer or an accredited property management firm for a fixed number
of years, - 9, 10 or 11 are popular choices. This is a commercial lease
(‘bail commercial’), which has certain repercussions in French law.
Within the
lease, the owner can have use of the property for several weeks of the
year with a fixed rental income guaranteed for the rest of the year. The
level of guaranteed returns can vary, but 3% -7% is typical.
Of course the
more personal use you have, so the guaranteed rental returns will drop.
The management firm or property developer sublets the leaseback properties
on a short term basis on behalf of the freeholders, offering other services
such as cleaning and breakfasts that qualify the letting business as being
like hotel letting, hence making the rents charged by the management firm
subject to French TVA (VAT purchase tax).
Within the
scheme the French government agrees to offset the TVA payable on the purchase
of the property against that charged to the short-let customers. In most
cases you pay the VAT on purchase and receive it back from the government
within five months of the purchase.
It used to
be that a proportion of the TVA would have to be repaid if the property
was sold within the 20 years, however recent changes to the law have now
removed this penalty, but there are certain conditions that need to be
met. |
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