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Your French Property are specialist providers of French property to the overseas market. Whether you are seeking a leaseback investment, a holiday home or a permanent place of residence in France we can help. Due to our long standing relationships within the French property industry, we are able to cherry pick the best properties as they come on the market and represent the major developers and estate agents in France. Our dedicated team of bilingual staff are on call to help you locate the perfect property and to assist throughout your purchase, simplifying the process and helping you free of charge.
Leaseback
Become a French property owner and receive a 19.6% VAT rebate on new build leaseback property, whilst earning a guaranteed rental income from an established management company.
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Information on Leaseback property
The End of the Lease Contract
At the end of the lease contract it is the aim of many owners to renew for at least the same period of time as to be in a position to keep the full VAT refund and to avoid capital gains tax liability (can be applicable if the property is sold before 15 years).
Some owners may wish to renegotiate the terms of the lease to maybe include more personal occupation etc. in which case it is generally advisable to begin negotiations at least 6 months to a year before the actual lease contract expires.
Similarly, those who do not wish to renew the lease contract should serve the appropriate notice as set out in the lease contract. In the case that this is not stated in the contract the minimum is normally six months although a years notice is recommended.
French commercial leases are governed by French Commercial Law which is a complex matter and protects the tenant.
The law actually states that the head tenant can claim an indemnity if they are evicted from the property at the end of the lease contract. The law actually permits for the tenant to have a right to renew the property when the lease comes to its term.
Whilst this is more applicable for high street shops and it is not the intention of the property management company at the start of the lease it is a possibility and should be taken into consideration.
Some management companies will provide owners with a letter stating that they will not ask for these fees as to reassure the owner.
In the case where eviction indemnity was to be paid should the owner not wish to renew the lease, French agents expect or have experienced eviction fees of approximately 6 months to 1 years worth of rental income earned by the owner of the property. This is a relatively small amount when capital appreciation and the VAT rebate is taken into consideration.
In any case, the owner is the freeholder of the property at all times, and if after the lease contract is terminated they can do as they wish with the property.
If the owner of the property wished to sell it during the lease period this can be done and the new owner would have to honour the remainder of the lease.
If the property was being sold after the lease period then it can be sold as a normal property through a local estate agent.
