1.    What type of investment should you make?

There are three possible types of buying in the French Alps:

- The purchase of a holiday home for personal purposes exclusively
- A purely financial investment
- A mixed investment with profitability (by letting) and personal occupancy

2.   How would you use the apartment?

If you want immediate profit coupled with long term investment you should buy with a Leaseback scheme! It is the purchase of an accommodation in a new touristic residence, that is to say a residence with fully equipped apartments (kitchen and bathroom), ready to live in, usually offering recreational facilities such as sauna, swimming pool, fitness rooms, etc. The buyer signs a commercial lease with the residence manager for a minimum length of 9 years (renewable). During this time, the management company collects the rents, is in charge of the usual maintenance and everything that concerns marketing to find tenants. A share of the rents is then paid to the owner, according to the purchase agreement he chose: either a purely financial purchase (the owner receives therefore the maximum profitability for the accommodation) or a mixed purchase (the manager deducts the number of weeks the owner used for his own leisure from the rent he should have received with a pure investment option). The maximum occupancy rate is usually 8 weeks (but can be up to 6 months), but it is advised not to exceed too many weeks, otherwise the profitability become too low. These terms (number of week and their distribution) must be determined in the contract with the agent and the management company. It is important to note that there is a possibility at the contract renewal (after 9 or 11 years) to modify the personal occupancy and the rent paid accordingly.

With this type of purchase (LMNP), the property is financially depreciated because the leaseback enables to collect rents which will not be taxed for the next 20 years (it uses complex French tax calculation which is taken care of by a French accountant for €280/year).

With a French leaseback LMNP scheme, the owner can use his property up to 6 months per year.

3.   Which return do you expect from your investment?

Usually, the profitability fluctuates between 3.5 and 4.5% according to the development, the location and the potential future capital appreciation. The difference between the yields comes from the price of the lands, not the rents, which are roughly equivalents for the same types of estate with equivalent locations.

4.   Where to invest in priority ?

Be careful not to buy anywhere! Pay attention to investments in ski resorts where the prices rose sharply recently and are now at the “maximum of the maximum”. On the contrary, it is advised to look around alpine resorts at high altitude, where the prices haven’t reached their maximum potential yet, such as Les Arcs, Tignes, and Les Ménuires. Or the resorts linked to a major ski domain.

You should notably favour the resorts located at least 1,800m high. All the consulted experts agreed on this: it is necessary to give priority to the high altitude resorts, which will offer – a priori – a good snow cover for a long time again. Some prefer the North Alps (Haute Savoie), offering a better snow covering rate considering their aspect. The director of the Pierre-Simon Laplace Institute considers that if the weather becomes warmer, the average snow cover rate will raise from 100 to 150 metres every 1°C. According to him, 2°C temperature increase will be overtaken in 30 years.

Think about alternatives to ski. « People’s habits have completely changed » says Pascale Jallet. People skiing all day long become scarce. Consequently, you should better choose a resort which diversifies its activities.

5.   Finally, will your investment be as interesting as a seaside investment?

Despite the crisis, the resorts occupancies in the Alps are always close to 100%. Besides, as the buildable lands in the mountain become rare, mountain properties promise a good price resistance to economic fluctuations. It is possible to make interesting investment profits in ski resorts which are relatively preserved from the global warming: numerous tourists go there, and as a consequence, rents will rise in the future. It could be profitable as well to avoid some resorts in a too low altitude. Jim Beattie favours an investment combining pleasure and profitability, so that the owners also enjoy their holiday home.

Source : www.challenges.fr

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Why were leasebacks introduced?

The initial aim of the scheme was not only to create new jobs, but also to increase the supply of holiday homes and, consequently, improve tourism in France. After the start of the Cold War in the early 50’s, the Suez Canal crisis in 1958 and the Cuban Missile Crisis in 1962, the world entered into a ‘Thaw’ period in the late 60’s. People wanted to experience something new, and this is how the great expansion of tourism happened. Around 1968-69, following the increasingly large number of tourists visiting France, the French government recognised the real need to develop investment in the construction of tourist residences.

How were leasebacks introduced?

In the early 80’s, the French government launched the LMNP (Location en Meublé Non Professionnel) which is a fiscal system to build wealth in real estate on favourable terms. The purpose of this system is to increase the quantity of accommodation on the market. Little by little, the famous motto ‘BUY TO LET’ appeared. The ‘lease’ concept was officially born when the French government decided to introduce the ‘leaseback’ model in the late 80’s to augment the amount of quality holiday accommodation available in areas capable of attracting more tourists. This strategy worked very well, all the more so as this concept appeared and began developing at a time when the country’s construction industry needed a boost.

As an incentive to investors, the government allowed the VAT (19.6% for new build properties in France) on the purchase price of properties built for tourism or ‘leaseback’ purposes, to be recovered, representing a significant saving on the purchase price. This incentive, combined with massive investments in roads, trains and supporting infrastructures, as well as climatic, culinary and cultural benefits, led France to become the world’s most visited country!

What about leasebacks today?

Nowadays, leasebacks represent an important and strategic area not only for the real estate market but also for tourism. Indeed, If you regularly have a look at our French leasebacks, you’ll see they are located in or close to tourist areas (often near the seaside or ski resorts…) For example, they’re often located in the French Alps and in the south of France (to be more accurate along the French Riviera and Languedoc region).

Leasebacks properties have a lot of advantages such as:

- Low risk investment

- Hassle free maintenance

- Financial (tax) advantages

- The investor can use the property himself (depending on the terms of acquisition)

- Possible good returns

- The asset will be well looked after

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Today, Lyon is in full expansion! With the extensions of tube lines, upgrading of roads, the rehabilitation of the Saone coastline, the construction of ‘OL Land’ – the brand new sport centre, works are taking place everywhere in the capital of Rhone-Alpes. Even if the estate market is on the up (7% average price increases last year), targeted areas are such as la Part-Dieu, Gerland and Charlemagne are only just keeping their heads above the water.

Have a look at the main sites which will be offering very enthusiastic projects:

1. A new leisure space:

From 2014, inhabitants of Lyon will have access to the new leisure zone and shops of Confluence in the Gerland district. This project will be based on the other side of the Rhone, one of the main rivers of France, thanks to the continuation of a tramway line.

As far as activities are concerned, 1000 apartments will be available soon in the Bon-Lait residential area. Shops, schools and child care centres are opening their doors. It is therefore the right moment to make the first move if you want to buy old apartments (generally from the beginning of c20^th) which face the Rhone shorelines. To give you an idea, the average price is around €2,500 per square metre.

2. Apartments for young people:

In the 8^th arrondissement, 2 or 3-room apartments look cheap and are located in peaceful surroundings. Influenced by prices that soared in the Monplaisir district (€3,200 per square metre today), young couples or single people are opting to install themselves in the Grange-Blanche area. But be careful, prices are rising there so there’s no time to lose if you want a bargain. These buildings often have to be renovated with the square metre priced at €2,000, but you could easily find a 3-room apartment at the Place Bachut. This area has plenty of potential and you could still find a €150,000 furnished house in good condition available.

3. The new Villeurbanne:

Thanks to the new materials this area has been equipped with, Villeurbanne has moved forward a gear. Long having been considered as the retreat of those who couldn’t afford a house in the centre of Lyon, people will be able to find some bargains here. The major axis of Villeurbanne, the cours Emile Zola, will undergo an overall restructuring in order to give more space to pedestrians and cyclists.

Moreover, the Henri-Barbusse area will be redrawn. You’ll find a cinema, 25,000sqm of shops and offices, and between 600 and 1,000 brand new apartments. You should take advantage asap! To give you an idea of prices, you have to shell out €2,000 to €2,500 per square metre in the oldest properties, and over €3,200 for recent buildings.

4. The industrial zone in conversion:

It is probably one of the riskiest gambles of Lyon’s projects: transforming the former huge industrial site of Le Carré de Soie into a leisure pole. It is obviously an ideal place for property developers to do business. Within about 10 years, over 800,000 square metres of offices and buildings will open their doors. According to experts, prices should boom by 15% in the next three years. Its attractiveness comes from the closeness of the Place Bellecour (the town centre of Lyon) and the Saint-Exupéry Airport.

Beyond its football club of which the city of Lyon owes its international renown, it has become a trendy place through new dynamism, developers’ affluence and the construction of brand new facilities.

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Today, leisure extends into all sectors including real estate. During your French holidays, it is now very easy to take part in an activity even if you have never practised it before: it is an opportunity to discover France as you’ve never seen it before.

Whether indoor or outdoor, in summer or winter, here is a list of activities you could enjoy:

=> In the countryside:

Country leasebacks are also often close to the seaside. Hence, you can find many leasebacks on the French Riviera set at most 30 miles away from the sea. With good weather, you will find residences where you can find the following:

-          Football pitches

-          Badminton courts

-          Tennis courts

-          Dance floors

-          Swimming pool: either for swimming, diving or water polo…

-          Horse-riding: particularly when your apartment is located near a forest and part of a beautiful landscape, as local tourism is working well these days thanks to such small scale attractions.

Should you have a river or lake a stone’s throw from your residence, you could even practise canoe, kayak, rafting or pedalo boat…

=> In the ski resorts:

In the mountains whether in the summer or the winter, you’ll always be able to enjoy what nature has to offer.

Winter activities:

Of course, the first activity that comes directly to mind is skiing or snowboarding. Moreover, 99% of French ski resorts also offer sleigh rides! It is an opportunity to discover the mountainous landscape in an entirely new way  . And when it’s cold outside, luxury leasebacks often include well-being centres with fitness, spa, sauna and hammam.

Summer activities:

It is worth trying paragliding or hang-gliding in summer to take in the landscape as well as to literally get a breath of fresh air (in summer, temperatures in the mountains can reach up to 40 degrees in the shade). Another way to admire the landscape is by  helicopter ride, an experience you shouldn’t miss.

If you are used to teeing off like Lee Westwood or Ian Poulter, you will find a golf course in every ski resort in the French Alps. Unfortunately, on account of the huge amount of space needed for a golf course, it is still rare to find an 18-hole in a resort.

=> By the seaside:

By the seaside, apart from the pleasures of sunbathing, there are various clubs offering afternoons of deep-sea diving! Discover the ocean floor and observe marine animals in their natural environment (fishes, algae, coral reefs…).

If you are ready to show off your prowess, show off by windsurfing, water skiing or kite surfing along the beaches.

-> Don’t believe that these sports are reserved for a certain category of people who can afford them. You can actually take lessons at prices far lower than you’d think. You don’t have to go to every class if you don’t want to. Although the more you go the quicker you’ll pick up the sport.

You’re on holiday, so have fun!

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We would like to share some good news with you – if you are a British resident and own a property in France (or in the EEA) or are thinking of buying one, and if it qualifies for Furnished Holiday Lettings status (rented out for a minimum of 70 days a year on holiday lets or a French Leaseback) – there is a tax break that you may not know about.

This tax break helps to claim back substantial Capital Allowances - letting you save on a huge amount of tax.

You could also save a lot of money but to take full advantage you need to act quickly as there is a deadline of the 5th April 2011.

To give you an idea of the potential tax saving: if you bought a property for 500,000 euros and you are a higher rate UK tax payer the tax saving is in the region of UK £35,000.

Approximately UK£15,000 can be repaid by the UK tax authorities from tax previously paid with the balance coming from savings tax that would otherwise be paid in the future.

Even though many of us might have bought our apartments a while back, we can still claim these Capital Allowances for the last few tax years as well as the current and future tax years.

This is something that you need to move fast on, as many of the benefits are reduced from April 2011 and in some cases, the savings will be even higher if you submit your claim by the end of this month.

If you think this could apply to you, please contact Quintin Bull.

His email address is q@quintinbull.com

Telephone number +44 7796 695750

Finally, if you buy another property before the end of this current tax year and already have a Furnished Holiday Letting or a Leaseback, you can also obtain this same amount of UK tax refund against your income tax being paid on your total earnings in the current tax year ending 5th April 2011.

So we thought we would make a couple of suggestions of potential properties you could buy that the tax break will massively facilitate.

Here are some suggestions of examples that qualify for this scheme:

Leaseback in La Plagne:
Leaseback in Briancon:
Leaseback in Provence:
Leaseback in Fayence:

For more information and news about buying a property in France, visit the Sextant website at www.sextantproperties.com

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You know it’s that time of year again when we start mentioning the first snow of the season. Often it falls a little later in the year, towards the end of November or the beginning of December, so could we see this as an auspicious sign for a good ski season in the Alps?

The honour of the first snow this year fell to Risoul, a ski resort in the Hautes Alpes, part of the Foret Blanche domain with neighbouring Vars. The 185 km domain (108 runs taking in 20 green, 43, blue, 35 red and 10 black) is one of the most beautiful skiable areas of the southern Alps, with over 300 sunny days a year, stunning panoramas and recent modernisation meaning queues are a thing of the past. Indeed its 50 ski lifts (ski tows, chair lifts and a cable car) make sure of that. Here you can practise alpine skiing, snowboarding, snow shoeing, sledging, dog sledding, and test out the snow park and snow mobiles in winter. In summer try horse riding, trekking, mountain biking, tennis, archery, volley ball, paragliding and rock climbing.

In these stunning surroundings, Sextant brings you a unique ski in ski out leaseback residence of chalets, complete with pool and fitness centre (ref 34208). It offers you a great investment with up to 4% yield, guaranteed rental income, VAT cash back and the possibility of occupancy too.
However if you sign today you will probably not be able to make use of it this coming February in the school holidays, but will have to wait until next ski season.

If you’re impatient to get out onto the slopes, then how about one of our apartments in Les Arcs, for instance a studio apartment with pretty views in a ski in/ski out residence, priced at €55,500 (ref 33076)? If you’re after slightly more space, a 2 bed apartment with balconies and views over the slopes could be ideal, and is a reasonable €220,000 (ref 19216). Tignes also has a number of ski in/ski out apartments, such as a studio apartment to refresh, ideal as a first investment at €55,000 (ref 33324), or a studio with a mezzanine, a balcony and ski locker at €85,000 (ref 29551).

To find out more about our extensive portfolio of properties in the Alps, from studios to chalets and investment developments, don’t hesitate to get in touch.

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Because the stock is limited per location we advise you to register your interest early

Prices from €105,000

Guaranteed rental income

Personnal occupancy available

Possibility to swap occupancy weeks between Ski / Sea / Country

Residence Le Domaine de Fayence

Location: Fayence (Cote d’Azur)

Google street view

Price: €245,000 (N’ 354)

Type: 2 bedrooms

Habitable surface: 52.7m2

3 weeks personal occupancy per year

Rental yield: 3.56% (€8,724/year)

Residence opened from May to November

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Residence Le Carre Beauchene

Location: St Maxime (Cote d’Azur)

Google street view

Price: €768,000 (N’ 11)

Type: 3 bedroom villa with private pool

Habitable surface: 125.7m2

8 weeks personal occupancy per year

Rental yield: 3.36% (€25,835/year)

Year built: 2005 (reduced notaire fees)

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Residence Le Domaine des Vignes

Location: La Croix Valmer (near St Tropez)

Google street view

Price: €140,000 (N’ 125)

Type: 1 bedroom cab

Habitable surface: 30m2

Rental yield: no lease contract

Residence open all year round

Year built: 1990

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Residence Le Hameau du Rocher Blanc

Location: Serre Chevalier(French Alps)

Google street view

Price: €350,000 (N’ 131)

Type: 3 bedrooms

Habitable surface: 63.5m2

4 weeks personal occupancy per year

Rental yield: 2.07% (€7,232/year)

Year built: 2007

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Residence Les fermes de Samoens

Location: Saomens (French Alps)

Google street view

Price: €160,000 (N’ 253)

Type: 2 bedrooms

Habitable surface: 42.2m2

2 weeks personal occupancy per year

Rental yield: 3.56% (€5,700/year)

Year built: 2005 (reduced notaire fees)

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The Management company:

• The company exclusively managing this development was created in 1976 and has been operating in the tourism sector for the last 40 years. The current European leader for self-catering holidays, this company manages 75,000 beds in 178 leaseback residences across France. Their property catalogue is used by 8000 travel agencies, with over 3 million holiday brochures being distributed each year.

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This free property leaseback seminar is designed to inform you as to how to choose potential properties and how to get good returns on capital invested. These investments can provide you with a palpable source of income as a holiday home. Additionally, you will be shown the advantages of a buying off-plan and how to avoid the currency fluctuations.

The seminar’s case-study will be luxury apartments in the ski resort of Avoriaz, the gem in the crown of the Portes-du-Soleil ski region in the French Alps. At an altitude of 1800m and over 650km of ski slopes, these luxurious apartments are much sought after. The resort is situated in the mountains overlooking the Morzine valley and is approximately 1 hour by car from Geneva airport in Switzerland.

As well as the obvious delights for both skiers and snowboarders alike, the resort houses a 2500sqm indoor water-park – dubbed “Aquariaz” – a perfect place for both old and young!

The resort is a car-free zone which ultimately makes it a safer environment for young families.

The guest speaker will be Jim Beattie who will speak about the apartments themselves and why property investors should be looking to purchase in this highly desirable alpine area of France.

This seminar is free but places are limited so book now to avoid disappointment.

Date: Thursday 19th January 2010

Price: FREE

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Sextant Properties is currently marketing a leaseback development for sale in the French Alps with a yield up to 4.5% (ref 19547). Having appeared on the market on the 21st September 2009, the development is attracting an overwhelming amount of interest. – as of the 12th November, 47 of the 77 apartments have been sold, and 5 others are reserved.

The 25 remaining properties still offer plenty of choice. It is unlikely that any of the properties will still be available in January. Here is why you can buy today without being affected by the unfavourable exchange rate:

The properties are ‘off plan’, which means that the buyer pays little now. Additionally, taking out a French mortgage will result in monthly payments which are the best way of responding to currency fluctuations.

If you buy apartment number C001 on the market at €175,800 (including VAT) you will need to pay only €154,764 because the VAT will be reimbursed. You can take a 100% mortgage on the price excluding VAT (€154,764) and the property can thus be financed in the following way:

> Due now 5% Reservation deposit: €8,401
> On signature of the mortgage offer, brokers fees €774 to be paid in December 2009
> Just before signature with Notaire, Bank fee €1548 (to be paid in March 2010)
> After signature with the Notaire refund of extra deposit €2,248

For the next 24 months you pay life insurance payments of around €41 per month (subject to approval). The delivery is scheduled in November 2011. You will then start to receive a rental income every three months from La Grange, and this will be used to pay back the mortgage.

Our specialist broker, Athena Mortgages, gave us a quote for this particular property, as follows:

The start date for repayments will be in March 2012. The buyer will need to pay €286 per month from that date. The rental income will be increased every 3 years, and, for this reason, the shortfall will decrease with time.

In summary, the purchase of an ‘off plan’ property worth €175,800 would only require an initial payment of €10,723, which would be paid in several instalments. Industry experts predict that the exchange rate will have improved significantly by March 2012, making the reality of investing in French property far more accessible than most people think.

If you do not want to miss this unique opportunity, contact us on 020 7428 4910 or visit the reference 19547 for more details

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The Eurostar is arguably one of the best inventions of the 20th century – it is without a doubt the best and easiest way to hop between London and Paris. It is sleek. It is comfortable. It is fast. It is entirely carbon neutral. It is very, very stylish. And, from the 19th December 2009 and the 17th April 2010, it can whisk you from St. Pancras International or Ashford International to the ski resorts of Moutiers, Aime-la-Plagne and Bourg-St-Maurice at a seriously speedy 186 miles per hour. If booked early enough, prices are competitive – a Standard class return journey begins at £149, while a Leisure Select ticket, including meals, drinks and extra comfortable seating, starts at £229 return. One of the many advantages of using the Eurostar Snow Train service is that it deposits you on the doorstep of your resort – it is merely a case of hopping on the train in London or Kent, settling back to enjoy the stunning scenery, then hopping off the train at the other end, ready and raring to hit the slopes. Either opt for the day train, which departs from St. Pancras at 10am and arrives at its last stop in Bourg-St. Maurice in time for dinner around 8 hours later, or the overnight train which leaves at 8.30pm and arrives at 6.30am, allowing you time to grab breakfast before hitting the slopes. It is worth taking into consideration the fact that if you decide to travel on the night train in both directions, it will allow you to spend eight days on the slopes rather than the usual six. Those travelling with children needn’t worry about sharing the train with crowds of drunken revellers, either – Eurostar will be imposing limitations on the amount of alcohol passengers can bring onto the train with them, so a restful journey is assured. Snow Train passengers also benefit from an increased luggage allowance, allowing you to pack clothing and equipment for the whole family without resorting to wearing it.

For avid skiers looking to invest in the French property market, there is plenty of affordable accommodation in the most popular Alpine resorts, conveniently located for the Snow Train service. Fully furnished leaseback apartments in a new 4 star development in Les Arcs cost between €222k and €428k, have between one and three bedrooms, and come with access to a superb leisure complex including a swimming pool, sauna, hammam, jacuzzi and fitness room. The complex is a stone’s throw away from the station in Bourg-St. Maurice, the last stop for the Eurostar Snow Train, making it unbelieveably easy to travel from the UK in comfort without having to haul mountains of ski equipment between the airport and your resort. As all the leaseback apartments come with a guaranteed return on your investment of between 3.8% and 2.5%, dreams of a cosy apartment in a winter wonderland have the potential to become a reality.

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