There are 4 annual fees to be paid on a French leaseback property

1. 1. The Syndic or Managing Agent;
      

   2. is both the manager of the building and the regulator of relationships between owners, service suppliers, and the insurance company responsible for the dommage ouvrage (the 10-year "building defects liability insurance" that must be taken out by the developer of any apartment building).
      

   3. This must be paid each year by the property owner

1. •Notary fees – a copy of the Notary invoice detailing the fees should be forwarded to your French Accountant
   

2. •Tax Fonciere – a copy of the annual invoice for land tax from the French Revenue should be forwarded to your French Accountant
   

3. •Accountants Fees - The owner normally pays for 3 years accountants services initially with the legal fees. After 3 years, the accountancy firm may send a request for fees for the next year’s accounts.
   

4. •Tax d’Habitation – if you receive this invoice for habitation tax from the French Revenue, a copy of should be forwarded to your French Accountant
   

5. •Redevance Audiovisuelle - – if you receive this invoice for TV License from the French Revenue, a copy of should be forwarded to your French Accountant
   

6. •Syndic Fees – a copy of the annual syndic fees should be forwarded to your French Accountant
   

7. •Bank Statements – copies of annual bank statements for the loan on the property should be forwarded to your French Accountant to offset the interest charges against rental income
   

8. •Travel Expenses – copies of travel expenses to your French property should be forwarded to your French Accountant
   

9. •Miscellaneous Fess – other annual expenses relating to your French property should be forwarded to your French Accountant
   

It is advised to send copies of the following to your French Accountant;

1. •copy of the reservation contract which includes the price of the apartment
   

2. •copy of the furniture contract which includes the price of the furniture

EXPENSES TO OFFSET AGAINST RENTAL INCOME FROM YOUR FRENCH LEASEBACK PROPERTY

TAX FONCIERE INVOICES TO BE PAID BY OWNER FROM YEAR 3 ONWARDS

1. 1. TAX FONCIERE - LAND TAX
      

   2. 
      

   3. This is payable by the property owner every year from year 3 of ownership. The developer normally sends the purchaser a H2 form to complete during the purchase process. By the purchaser completing this form and returning it to the French authorities, the first two years of paying Tax Fonciere are exempt.
      

   4. For late payment, there is normally a penalty of 10%. The deadline is clearly indicated on the invoice to avoid a penalty. The third page shows an example of an overdue payment for Tax Fonciere.
      

   5. example 2 TAX FONCIERE 2.jpg
      

   6. example 3 TAX FONCIERE 3.jpg
      

   7. example 4 TAX FONCIERE 4.jpg
      

   8. example 5 TAX FONCIERE 5.jpg

TAX D’HABITATION INVOICES TO BE PAID BY OWNER - NORMALLY EXEMPT FOR FRENCH LEASEBACK

1. 1. TAX D’HABITATION - HABITATION TAX
      

   2. 
      

   3. This is payable by the property owner every year of ownership.
      

   4. Owners of French Leaseback property are normally exempt from this annual fee

TV LICENSE INVOICE TO BE PAID BY OWNER - NORMALLY EXEMPT FOR FRENCH LEASEBACK

1. 1. TV LICENSE - REDEVANCE AUDIOVISUELLE
      

   2. 
      

   3. This is payable by the property owner every year of ownership.
      

   4. Owners of French Leaseback property are normally exempt from this annual fee

SYNDIC - GESTION INVOICE TO BE PAID BY OWNER

1. 1. VAT @ 5.5% REIMBURSEMENT - EXCESS RENT
      

   2. The management company pay the owner the rental income inclusive of VAT @ 5.5%. e.g. An apartment purchased for € 100,000 with a rental return of 5% as per the lease agreement pays € 5,000 p.a.
      However, the management company pay the owner € 5,275 where the € 275 is the excess 5.5% that must be reimbursed to the French Revenue. The rental income is still 5% on the purchase price.
      

   3. EXAMPLE 2 RENTAL VAT 2.jpg
      

   4. EXAMPLE 3 RENTAL VAT 3.jpg
      

VAT REIMBURSEMENT - 5.5% EXCESS RENTAL INCOME - TO BE REPAID BY OWNER TO FRENCH REVENUE

1. 1. ACCOUNTANTS FEES - FENCH TAX RETURNS
      

   2. 
      

   3. The owner normally pays for 3 years accountants services initially with the legal fees. After 3 years, the accountancy firm may send a request for fees for the next year’s accounts.
      

   4. 
      

FRENCH TAX RETURNS - IMPOT SUR LE REVENU FEES

1. 1. TAX RETURN FROM FRENCH REVENUE
      

   2. 
      

   3. French tax returns showing the expenses that can be offset against rental income.
      

   4. The column on the left shows the expenses that can be offset against the rental income for the previous rental year.
      

   5. The column on the right shows the rental income from the management company.
      

   6. TAX RETURN BALANCE SHEET TAX RETURNS 2.jpg
      

1. 1. Tax Fonciere – Land Tax
      

   2. This tax is applicable from year three of ownership. The developer normally sends the purchaser a H2 form to complete. By completing this form and returning it to the French Revenue, the land tax is exempt for the first two years of ownership.
      

   3. Tax d’Habitation – Habitation Tax – NORMALLY EXEMPT
      

   4. This is not applicable to owners of French Leaseback properties because the property is managed by an onsite management company who have a commercial lease on the property for 9 to 12 years, subject to the lease agreement.
      

   5. Redevance Audiovisuelle – TV License – NORMALLY EXEMPT
      

   6. This is not applicable to owners of French Leaseback properties because the property is managed by an onsite management company who have a commercial lease on the property for 9 to 12 years, subject to the lease agreement. The commercial lease (Bail Commercial) should be reviewed prior to purchasing the property that the TV License is payable by the management company.
      

   7. Syndic Fees
      

   8. The Syndic or Managing Agent is both the manager of the building and the regulator of relationships between owners, service suppliers, and the insurance company responsible for the dommage ouvrage (the 10-year "building defects liability insurance" that must be taken out by the developer of any apartment building).
      

   9. VAT on Rental Income (5.5%) to be reimbursed
      

   10. The management company pay the owner the rental income inclusive of VAT @ 5.5%. e.g. An apartment purchased for € 100,000 with a rental return of 5% as per the lease agreement pays € 5,000 p.a.
       However, the management company pay the owner € 5,275 where the € 275 is the excess 5.5% that must be reimbursed to the French Revenue. The rental income is still 5% on the purchase price.
       

   11. Accountants Fees
       

   12. The owner normally pays for 3 years accountants services initially with the legal fees. After 3 years, the accountancy firm may send a request for fees for the next year’s accounts.
       

AFTERCARE VIDEO TUTORIAL FOR FRENCH LEASEBACK INVESTORS

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ACCOUNTANTS FEES - TO BE PAID BY OWNER EACH YEAR