For all our properties developments or resale properties, we can assist you with a property management contract including the rental of your property and its general maintenance. If you have bought a property in France with a view of generating an income, you have the choice of two type of lease.
– Unfurnished lease
– Furnished lease
The choice of the lease used, will depend on different factors such as the usage you want, the regularity of the income needed, the flexibility of the exit strategy and the location of the property.
This is the equivalent of a buy to let property. You have purchased a property, which you intend to rent for some years. Your exit strategy is either to use it as a second home in few years, or to sell it.
How does it work ?
We find a suitable tenant for your property who will sign a 3 years unfurnished lease. You will receive your rental income per quarter. We organise the viewings of the property, the vetting of the tenant, the draw up of the lease, the inventory of the fixture of the property, collect of the rent and will oversee any maintenance required on the property.
All income generated by your French property will have to be declared in France and rental taxes are to be paid to the French tax office. This rental income is to be declared under the taxation called “Revenus Fonciers”. You will be able to off set some charges against your rental income such as the real estate tax (Taxe Foncière), management fees, loan interest (if you have purchased it thanks to a French mortgage), insurances, any work done on the property.
A regular and secured income (you can contract out an insurance to cover the risk of vacancies and non payment)
You can sell the property at anytime with the on-going lease running
If you want to sell the property without a tenant, you need to respect the French consumer act law: you need to give notice to quit to your tenant 6 months before the end of his lease and you need to offer him first choice to buy the property (at your price and conditions).
High level of tax to be paid on the income
You have bought your French property as a second home but you are looking at generating some money. The property is furnished and located in a prime location (large cities like Paris, Lyon etc. or holiday destination like Provence – French Riviera – French Alps etc.). It will be marketed for holiday or business rentals for short to medium stay (up to 90 days). The owner can use it as a second home and the strategy is usually a long-term investment.
How does it work ?
The owner registers as LMNP (Loueur Meublé Non Professionnel) and obtain a registration number allowing him to rent his property for furnished rentals.
We find the tenants for short stays, we take care of the check-in and check-out, laundry and cleaning the property, sales and marketing, billings and accounts, holding deposit, maintenance of the property. You get your total rental income once per year.
The revenue will be declared under the “BIC” taxation. With this system, you will be able to depreciate the price of the property against the income received so it does make it a very efficient system to reduce your rental tax to a minimum. Very often for 10 to 15 years, the offset charges will be higher than the income received so you will not pay any tax on your income in France.
Flexibility to use your property
Higher rental income
Rental tax to be a minimum
If the property is new, possibility to recover the VAT on the purchase price (subject to conditions)
You can sell the property whenever you wish or stop renting it
No rental guarantee
More turnover in the property as it is short stays