Leaseback

Build-up of property assets with freehold benefiting from a privileged situation, in city centre or highly-rated holiday resorts

The VAT rebate

When you purchase a new build leaseback property, one of the main advantages is that you get the VAT back on the purchase price. Currently the VAT is at a rate of 19.6% on the acquisition price of new build property.
This normally takes up to 4-6 months to come through, but some developers will advance the VAT for the government and reclaim it back directly.
Typically, each development where the VAT is to be claimed back will chosen an accountancy firm to look after this aspect of the purchase. It is worth stating at this point that is very important to use an accountancy firm as this is a complex process and if the procedures are not respected then you will not qualify for the VAT rebate.
The main reason in giving the VAT rebate is that VAT is earned by the French authorities during the period that the property is let out. This is on an understanding that the property will be let out to tourists for a period of 20 years. If the lease contract was terminated or the property sold before this time, then a part of the VAT would need to be re-paid the French authorities pro-rata. This works out at being 1/20th per year.
On refurbished property or renovated properties, the 19.6% VAT rebate is not normally applicable but some still do have a VAT rebate element.