UK INVESTORS are warming to the idea of buying into holiday developments in France free from VAT.
Holiday complexes, known as residences de tourisme, are built by a developer who then sells the units to investors on a leaseback scheme basis.
Investors lease the units back to an agent which furnishes, lets and maintains them.
To encourage the building of tourist accommodation, the French government exempts leaseback residences de tourisme from VAT on the purchase price, which currently stands at 19.6 per cent.
The initial lease is for nine years, with an option to renew for a further 11 years. If the lease is terminated early, a proportion of the VAT must be repaid.
Owners can use the property themselves for a maximum of six months.
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