Maisons de Biarritz - Tax advantages

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Sunday, May 18, 2008

Tax advantages

Presentation

Eligible SIPP investment

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PRESENTATION

Maisons de Biarritz (MdB) provides you with a unique investment opportunity to acquire property in a number of exclusive Maisons de Biarritz developments around France.

Buying a property as part of the Maisons de Biarritz "Property for Pleasure" concept you can enjoy exciting tax breaks thanks to French fiscal legislation calculated according to your present and future fiscal profile. Our expert advisors are at your disposal to explain the advantages and terms of these arrangements.

All our properties come with the assurance of a guaranteed rental income, as well as tax advantages that make our properties a significant investment opportunity.

TAX EXEMPTION

Expenses relating to a mortgage-based purchase (including interest on loans, notary fees, property tax and refurbishment of property and fittings) are totally offset by the rental income for a period of 25 to 30 years.

ADVANTAGES

	Full VAT refund on the total amount of the purchase, i.e. 19.6% of the purchase price (VAT often advanced by the developer, MdB).

	Outgoings related to the letting your property (i.e. financing fees, registration duties, interest on loans, property tax, accountant and legal fees etc.,) are deductible from your rental income and generate a fiscal deficit which makes them tax-exempt.

	As a leaseback owner you own 100% freehold property.

	From a fiscal point of view, depreciation of the building is only chargeable up to the value of rental income less other charges, the excess being carried forward indefinitely and generating tax-exempt rental revenue over the long term.

	French leaseback property generally qualifies for SIPP investment under UK pension law. This allows you to invest at an effective 40% discount.

	Financial quotes and solutions. Invest only mortgages available from Savills Private Finance.

Conditions

	Leasing of furnished property must be carried out by a specialised French company with a signed, 9-11 year commercial lease which is renewable. MdB – Exclusive Hotel Resorts provides a comprehensive management programme so your renting is hassle free.

	For tax purposes, income from these lettings comes under the heading of Industrial and Commercial Profits (BIC).

Your Fiscal Status:

	LMNP 'Loueur en Meublé Non Professionnel' Non-professional lessor who earns less than €23 000 per annum or half of their revenue in rental income.

	LMP 'Loueur en Meublé Professionnel'' Professional lessor who earns over €23 000 per year or over 50% income from rental. The tax payer can offset any losses on rental against total income and any gain resulting from the sale of the property will be taxed as business capital gains.