Hi
Just to pick up on one some of your points ...
>> 'do you speak French? Don't even consider this if you can't at least read French documents'
I would think this is a bit extreme. English language contracts are at the best of times loaded with legal jargon (from a bygone age) and are extremely difficult to understand (even for a native English speaker). As a result if someone buys property in Ireland, UK, US, ... they generally use a legal advisor to explain the contract to them. France is no different and you will find plenty of English speaking Notaires/legal advisors that are more than happy to assist. Also English translations of all documents are often supplied to potential buyers of leaseback units.
***I don't think you need to be fluent. But you do need someone to translate everything - and not just a language translation but cultural too.
The standard of English is poor in France compared with northern European countries. Also, there is a tendency to not make an effort. Also, the whole legal system in conceptually different in France. They talk a lot of "rights" and expect everything to be codified. Really, Irish people make a lot of legal assumptions that just don't apply in France.
>> 'are you familiar with French law, French taxes? Both are considerable more complex that the Irish equivalents. Things are also conceptually different'
Of course laws and taxes will differ between countries. However, I don't necessarily agree that this means they are more complex. In fact I would think that some of the differences are positive and loaded in favour of the buyer in France. Also, many of the French tax schemes are simpified for small time investors.
***Anyone who says this about the French tax system, one of the worst in the world, clearly has a vested interested in Irish people buying properties in France.
>> 'for example, forced inheritence means that you don't have control over what happens after you die'.
I would agree that many Irish people buy without realising or considering the implications of inheritance. However, once a buyer is aware of the relevant laws and the rights of the children to inherit then there are schemes to ensure that the intended inheritance is achieved on the death of the owner(s). The problem isn't necessarily the laws but perhaps the ignorance of the laws.
***You still don't have control. Even if you have advice, you have to follow a system that very strange for Irish people.
>> 'the joint tax treaty between Ireland and France is over 35 years old and under review.'
Because the treaty is one of the older tax treaties involving EU countries, it needs to be brought into line with more modern treaties. I cannot see the review introducing anything unusual that we wouldn't have seen in other treaties (involving EU countries). On a positive note it is likely to clarify the situation with CGT.
>> 'French people invest in these as tax investments - to save on their French INCOME TAX'.
I also have seen many locals view leasebacks as investments providing supplements to their income/pensions.
>> 'The fact that you can retain use of the apartment for a few weeks makes this type of investment useful for French people'
Depends on the development - not all developments offer personal use. In fact many that are geared towards investors offer maximum rental returns and no personal use.
>> 'get the loan/mortgage in France. le fisc (the French version of the Revenue Commissioners) don't give tax breaks on foreign mortages (you can try - but the system of negotiation with French taxmen will drive Irish people crazy)'
Agreed. It is far more tax advantageous if you can raise the loan in France. However, the lending rules are a good deal more controlled and strict than Ireland. On the other hand French banks offer some very interesting mortgage products.
*** Glad to see we agree on something! No crazy 100% loans, etc.
>> 'don't believe any of the stuff about capital appreciation. They are crazy figures'
Not sure which figures you're talking about. Like Ireland and the UK (and indeed other countries) real estate market information can be published from a number of sources (e.g. lenders, agents, public bodies, etc.).
***I don't think there's a problem here. You deserve what you get if you believe the rubbish published on some of the sites on the Web.
>> 'you'll be signing a commercial lease - so you're legally bound to offer renewal terms'
This is open to interpretation. If you don't offer a renewal on a commercial property (which is your entitlement) then the tenant may be entitled to compensation. The relevant laws were framed with offices, retail units, industrial units, etc. in mind where the non-renewal would have a serious impact on the business of the tenant. The laws were not crafted with leasebacks in mind. From my research, I found no evidence of any case taken against an owner of a leaseback unit who refused to renew the lease. The legal advice I received was that even if the tenant did look for compensation, not to pay it as the law was un-enforceable. If you have evidence to the contrary then I would be interested in hearing it. It would be an important consideration for members of this forum thinking of buying leasebacks.
***I've no idea about this. But my experience in France is that if a law exists, and people think they have a "right", then they will claim it. The whole French mentality for life in general (perhaps due to the education system) is not one of right/wrong but "legal rights"/responsibilities.
>> 'do you have any plans to sell the property? Do you know about French CGT? It's a complex area'
I don't feel that French CGT is complex. In fact I think the reducing liability (over the length of ownership) is very fair and perhaps we could learn something from it.
***The CGT on leasebacks is restrictive, complicated, but works out very well compared with the other forms of CGT in France. Clearly you work in the industry if you don't think its complex. You've given yourself away there.
Regards,
Paidi