A straightforward buying process…
Legal and accounting issues
Buying the freehold to your own room or suite is made easier because we are on hand to explain what’s happening at every stage, to introduce you to English speaking notaires who will handle the process, and to assist you with the paperwork which is already translated into English.
The documentation is standard and you have the following agreements:
- Preliminary Contract – between the purchaser and Profin
- Deed of Sale - between the purchaser and Profin.
- Lease - between the purchaser and Profin.
- Co-ownership Agreement – all purchasers have a share in the common parts of the hotel
All legal issues are handled by Delahaye Saleur et Delanoe, the leading Notaires in the valley, who in accordance with French practice act for both the buyer and the seller.
We can also introduce you to the leading accountants in the area, In Extenso, part of the Deloittes group, who handle all the investors’ tax returns in the hotel.
Under French law, there are significant tax benefits for people who invest in Leaseback property. These include a VAT neutral investment, 100% writing down allowances and possible exemption from Capital Gains in France depending on how long you own your property. Advice can be sought from In Extenso on this.
How it works in practice
You can secure a room or suite with an initial deposit of 5% of the purchase price. This is paid by you directly to the Notaires, who hold the deposit as stakeholder. This enables you to exchange contracts. The contract is usually conditional on your obtaining a mortgage. If an investor is unable to obtain a mortgage, then his deposit is returned.
On completion, the parties enter into a Deed of Sale and the balance of the purchase price is payable. The sale is completed ex VAT, which is handled by Profin on your behalf, which takes the worry and hassle out of having to deal with the French tax authorities.
Maintenance
The hotel is maintained by Esprit Ski under their nine year lease. In addition, in accordance with French law, the investor has the benefit of a ten year insurance policy which has been provided by one of the leading French insurance groups, the MMA. This covers all structural defects in the property and was issued in 2007.
How to obtain a Mortgage
Profin works closely with Savills Private Finance, who will explain to you how the mortgage system works in France and assist you to prepare your mortgage application. A number of French banks are ready to grant mortgages to investors in our development, provided the potential purchaser can demonstrate he has the necessary income to support his mortgage payments.
The advantage of working with Savills is that they know the development well and there is no additional cost to the investor in using their services, since Profin pays Savills fees on completion.
Invest through your SIPP
In August 2011, HMRC gave their formal approval to an investment an individual had made in the hotel through his SIPP.
If you wish to structure your investment through your SIPP, then Profin can put you in contact with a number of SIPP providers that have already approved an investment in Belle Plagne.
An important point to note is that if you wish to invest in the hotel through your SIPP, the room cannot be used for your own personal usage or you will lose the tax benefits involved in the UK.
Investment summary
- Acquire the freehold of a room or suite in the hotel and a share in its common parts
- The Hotel des Deux Domaines is leased to the specialist family tour operator, Esprit Ski, under a full repairing lease which has five years to run. At the end of the lease, this will either be renewed or a new Management Contract will be entered into with another hotel group
- The hotel is the flagship hotel of Esprit
- Profin provides an experienced asset management team with good knowledge and family ties to the local market
- An onshore tax efficient structure
- HMRC have approved an investment in a room or suite for SIPPs
