Leaseback investment Lanquedoc France

Hi,
I am intrested in a leaseback property in Lanauedoc in the South of France to be completed by 2008, its 20 mins from Carcassonne Airport direct flights from Dublin with Ryanair, or 50 mins from Toulouse Airport direct flights with Aerlingus from Dublin, also Mountpellier 1 hour 15 mins by road.
They cost between €109,000 & €140,000, there is a 4% guaranteed rental income for 9 years & 2 weeks free personal use before May or after September.
It also states that it will qualify for 19.6% Vat return on the purchase price from the French goverment.
If i can come up with say €40k of my own money how do i go about getting a mortgage in France?. What do they mean by 4% guaranteed rental income for 9 years?. Do i get 19.6% refund in one payment from the French goverment or is it over a period of time?.

You will get the refund in 1 go, normally takes up to 6 months after completion,
You can a mortgage easy, some are now even offering 100% mortgages on leaseback properties.
You should look at the many previous posts regarding leaseback.

Thanks Arch i will look at the previous posts.

ARCH said:

You will get the refund in 1 go, normally takes up to 6 months after completion,
You can a mortgage easy, some are now even offering 100% mortgages on leaseback properties.
You should look at the many previous posts regarding leaseback.

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Not so sure about getting mortgage easily. I applied in June for a mortgage through Overseas Mortgages and still have not got firm approval, despite having supplied all the documentation required. Am not impressed!

I got my mortgage approval back in abot 2 weeks, however the mortgage company did not offer current account facilities and the opening of the current account with another bank ended up taking longer than getting the mortgage.

Regarding the VAT refund, be aware that this is based on 15 (or 20 ?) year ownership of the property. if you sell before 15 years, the french goverment will claw back a percentage of the VAT refund you received. I think it is 5% per year, (for each year up to the 15), but I am open to correction on that.

AFAIK it's 20 years you have to keep it for before there's no clawback. 5% per year then for 20 years = the 100%. Sell up after 12 years pay back 40% of the VAT refund.

Regarding VAT refund, i came across an article a while ago which seems to implies that there is a cap on the VAT refund.

The French government gives back the VAT which is paid on the new development; it currently amounts to 19.6% of the price. But, if the selling price was 100,000 euro then the price on which the VAT was calculated is 83,600 euro. You will get back 16,400 euro which is 16.4% of the price you paid.

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Does anybody know more about it?

I don't believe there is any cap. What this is saying is if the total price inclusive of VAT is 100,000 the net of VAT will be this divided by 1.196 €83,612 and your VAT refundable is this multiplied by 19.6% €16,388

I understand now.. Thanks Arch for the clarification.

Some banks in France have relaxed the rules and it`s getting very easy to get mortgages.

Hi

I've recently done a French sale & leaseback, painfully slow getting the mortgage sorted (they are even worse than the Irish banks, in terms of paperwork, turnaround time etc etc ) etc....

Here is a link for one of the French Bank's offering mortgages for investment properties, quite handy given the info is in English although I can't speak for the Bank in terms of service etc as not dealt with them to date (although they are a subsidiary of BNP, who are a well known large French bank, so they should be OK): [broken link removed]

Hope it helps

Cheers

G>