Finance Guide

Daily headlines in UK media are reminding us of falling property sales and falling property prices due to credit restrictions by the lending banks. The latest report out this week confirms that the number of mortgages granted in May this year is down to a third of what it was in May 2007!

In sharp contrast, the situation for purchasers in France appears to be very different for purchasers of leaseback properties.

An example is BNP Paribas bank which is offering purchasers at Chateau de Camiole 80% mortgages (subject to status). The 80% is based on the total price including the property, furniture and 19.6% purchase tax. As the properties are for sale on the French leaseback system, purchasers are allowed to deduct the purchase tax, which is paid by the developer and then reclaimed from the French Government, so in effect the loan is for 100% of the property value with the additional benefits that the properties are fully furnished!

Purchasers of Chateau de Camiole property are asked to pay the initial 5% reservation deposit from their own funds, but this can be reclaimed later once the mortgage is approved and the bank funds have been received.

Chateau de Camiole Apartment purchasers also receive a guaranteed income up to 4.10% without personal use and reduced income if they wish to use the properties up to 12 weeks per year with minimal running costs of €5 per m2 and the annual Tax Fonciere (€300 – €500). Villa purchasers, apart from the guaranteed income options, can choose a residential option with the facility to use the property up to 150 days per annum and sharing the rental income 50/50 with the developer.

The initial leaseback term is for 11.1/2 years and the developer is insured so the guaranteed income is protected.

Property prices are expected to increase on average 5% in France in 2008 which makes a purchase at Chateau de Camiole an even more attractive proposition!