Daniel Butcher of DTB Wealth Management highlights the most lucrative opportunities for expats who want to invest in a buy-to-let property in France
In the UK Buy-to-Let mortgages are a smart investment for property buyers. Although these loans do not exist in France, with the right advice buyers can invest in schemes that have similar outcomes and advantages.
A monthly income from a property and long-term capital growth are two major benefits that result from investing in a Buy-to-Let scheme. In France, however, the régime Loueur Meublé Non Professionnel (LMNP) de Service Hôtelier offers a comparable arrangement.
The “para-hôtelier” option can provide one of the best ways for UK expats looking to invest in French property. “Basically, the government says if you own and rent a property which is furnished and offers ‘apart-hotel’ type services you can avoid paying income tax on the rent,” said Daniel Butcher, Founder of DTB Wealth Management Services, a Conseil en Gestion de Patrimoine (CGP), which advises on financial, real estate and legal matters.
“As an LMNP, there is no VAT on the purchase and no income tax to pay as one can deduct, annually, the entire depreciation of the property, including the furniture inside, over thirty years,” he added.
The scheme, which Butcher describes as “an excellent operation” works by the properties being managed by a company, as per the para-hotelier regulations. They provide all the services, such as daily breakfast, regular cleaning during guest stays and provision of bed linen.
“They put their own label on it and then sell the different furnished apartments to buyers – they then control the entire operation for the buyer,” said Butcher. “This includes renting them out and making sure they are in good order, usually for 12-year contracts. This duration usually coincides with that of the loan the investor would take out, exactly like a Buy to Let.”
Alpine resorts, such as L’Ecrin Blanc in Courcheval and Mendi Alde in La Clusaz, which have these “Buy-to-Let” LMNP schemes available, make particularly good investments. This is because these properties can often be rented out for at least ten months of the year, due to high rental yields in both summer and winter seasons. LMNP schemes exist in other areas too, including étudiante (student residences) and retraite (retirement homes).
“These are the most successful for all – investors, tenants and promoters,” said Butcher. “With a huge number of ex-baby boomers reaching retirement age in perfectly good health, this is a flourishing investment opportunity.”
He added: “At DTB Wealth Management, we provide all of these and many more. Interested expats should get in touch as soon as possible so that we can explain the best options for their particular financial circumstances and portfolio.”