a 'Style Sustainable' fund structure for Tax-Free French Property Investment.
Domiciled in premiere European Zone.
Style
Sustainable
Historique French Ruines & Restorations.
Portfolio locations seduce with unique lifestyle advantage, maximising the attraction of French 'countryside living' and 'sustainable lifestyle' profiles, include Parisian Countryside Tranquility, Bordeaux Vineyards & Wine, South of France Village living & Mountain Slope Skiing in the Alps and beachfront paradise. Select 'ready to live' locations which are fully restored or french ruine locations which offer the unique capability to personalise history. Selecting a Santuary. Designing a life.
Sustainable Interior City Living Conversions.
Intelligence branded interior surface style, engineered through conscious design of aesthetics, comfort, technology and sustainability. Finishing each space with detailed lifestyle design and intelligence integration & utilising discretely installed technology, including personalized lighting design, automated entertainment systems & sustainably efficient heating & energy consumption. Integrating clients preferences, habits, desires, intentions and inspiration; delivers the client their optimum personalized, living enjoyment.
A unique special purpose vehicle investment structure within a European Securitization Company, facilitates tax free property investment for non French resident investors as bond holders of participatory notes.
Property acquisitions are made in a personalized compartment per investor which assumes the tax free advantages of the group 'securitized company' fund structure, whilst each remains completely independent for legal, tax, security, obligation and liquidation operations.
FRENCH
PROPERTY INVESTMENT
TAX FREE LAW ENABLED
as of.2004
Why Style Sustainable Investment Strategy?
The Style Sustainable French property investment and ownership structure enables tax free ownership, coupled with a low deposit aquisition, in one of the most stable and highly desirable lifestyle locations in the world.
The timing of the Style Sustainable French Property investment and ownership structure, presents at a time when French Property is at the bottom of the market due to the high tax fundamentals, high deposit requirement and therefore the high equity level necessary for aquisition.
Style Sustainable teams embrace connections between property owners, agents, customer connections, client managers, service providers, investment structuring specialists and if relevant, architecture and interior design restoration teams; to transact uniquely advantaged, efficient aquisitions, through a broad spectrum of connections across the globe.
Style Sustainable compartments enable:
Private Independent Aquisitions
1. high value property aquistions with independent owners for private use.
2. high value investment property aquisitions for inclusion within a managed rental porfolio.
3. high value ruin restoration property aquisitions for private use, rental investment or to sell for a capital gain.
Combined Investment Aquisitions
4. high value private property aquisitions, within compartments that combine multiple investors, for shared property use.
5. high value investment property aquisitions, within compartments which combine multiple investors, for inclusion within a managed rental porfolio.
6. high value ruin restoration property aquisitions for private use, rental investment or to sell for a capital gain.
2. & 4.
Investment Property for Rental Returns
Foreigners can purchase real estate in France without limitations and benefit from the tax advantages involved in leaseback purchase, which is one of the most tried and tested investment models in the international market place today.
Due to a very strong domestic and holiday rental market, many investors feel they can firmly rely on buying into a France's busy rental market. The vast majority of the French population rent their homes and this factor, along with a powerful tourist industry, makes for an ideal buy-to-let market. Due to popular demand, prices are increasing and investors are experiencing average net rental yields of 7%.
These homebuyers enjoy the privilege of owning an idyllic European property and receiving healthy profits from their investment. Due to France's popularity as the World's most popular tourist destination, there is always high demand for accommodation. Typically, rural restoration properties have been popular amongst overseas investors as the French dream.
Under the government's highly popular leaseback scheme, purchasers can buy freehold property and lease it to a holiday company for a typical period of nine years. In return, they get guaranteed rental income at average yields of 3 to 6% (some schemes guarantee yields of 5.5%). Although owners pay maintenance charges and management fees amounting to some 15% of rental income, they are fully refunded their VAT of 20%.
Properties can be used for personal use for between 2 and 8 weeks per year at reduced rates. High tourist numbers and the resulting strength in the buy-to-let market allows investors to reap in solid capital growth from their properties, all the while supplementing this income with high rental yields in many key tourist locations.
Why a Securitization Ownership Structure?
A 'special purpose vehicle' structure aquires each property within a Securitziation Company, where independent 'compartments' are created for each aquisition, that separate the obligations & liability of each asset & investor / owner.
The securitization company structure can be shared with multiple other investors, owners and assets, where the structure is similar to that of a bank.
For each investor, or investment target, within each compartment, it's assets are managed individually and are completely legally separate from each other, in the case of a compartment investment failure, complexity or challenge, eliminating any concept of shared risk between bond holders of
seperate compartments.
Property management inclusion.
The directors of the securitization company are responsible for the assets of each compartment and therefore, assume responsibility to manage all legislative requirements for the property ownership, management and maintence; including but not limited to, tax reporting, insurances, repairs and emergencies.
Tax advantage explained.
The ownership is held through the securitization company's issue of participatory notes so a bond holder (investor / owner) can retain their assets tax free & the profits from any capital gains made at time of sale are paid out tax free. In the interim, all of the annual taxes are avoided.
As long as all revenues to a compartment are entirely redistributed, then there is no taxation due from that compartment. Under the securitziation law of 2004, the difference between a bond holder and a shareholder, is that a bond holder is not recognized as an effective owner and therefore tax does not fall due.
The Investor becomes the shareholder in the participative notes with fixed and variable interest combinations, which are not exchangeable, not convertible, are fixed maturity and with no direct control of the asset but with a real shareholders relationship to risk and revenues.
Normally, if purchasing property in France,
the tax you would pay is :
Registration fee - 5,09%
Wealth tax (ISF) - 0,5% to 1,50%
Income tax - 33,33% to 41%
Annual tax - 3% on market value each year
Capital gain tax - 33,33% to 48,83% (33,33+15,5)
Transfer & gift duties - up to 60% Legal restriction
Tax through the Securitization Vehicle structure:
Registration fee:
5.09% if acquired as a standard property
0% if already in a securitization company compartment + participatory notes are transferred.
- Wealth tax (ISF) 0%
- Income tax 0%
- Annual tax 0%
- Capital gain tax 0%
- Transfer & gift duties 0% + no restriction
This provides an excellent product for non resident investors to aquire a zero-tax, French Property investment. Given the current climate, this structure may be the only structure that allows a French property investment to be a highly attractive and stable investment.
Now that the double tax laws have changed to eliminate trust investment structures allowing this same benefit, the structure previously offered investors a far safer alternative to a trust as the shareholders & directors of the securitization company cannot take any action relevant to a compartments assets without the agreement and approval of bond holders, which a trust allowed.
Although for tax purposes, the investor is not the effective owner, as bond holders they have complete control over any or all actions relevant to assets held and they benefit from the full profits of any transfer or liquidation, tax free. The securitization structure is also more robust than using a double tax treaty. Luxembourg is reliable for maintaining consistent laws and therefore the structure can assume long term stability.
Securitization company directors include a director of the Luxembourg central bank. The legal architect of the structure is one of the key advisors to the French tax administration and the securitization structure has existed successfully now for 11 years.
Why French Property Investment?
Due its inherent, seductive charm and a wide diversity in tourist attractions; France is the world’s top world tourism destination, attracting around 60 million tourists from all over the world, including some eleven million British.
Lifestyle Appeal.
France is the world leader of elegence with this sense of style infused across aspects of French lifestyle, from its exquisite cuisine, to the fashion industry and its ornate art and architecture.
Famed for its civilized and relaxed pace of life. Tranquil beachside escapes to dramatic mountains and coastlines; magnificent chateaux's and internationally renowed vineyards, to the chic Riviera or the culture-packed sophistication of Paris; an abundance of natural countryside living experiences or numerous pretty rural towns and villages with sporting activities from bike-riding to hiking.
Enormous stretches of coastline bordering the Atlantic, Mediterranean and English Channel offer varied coastal beauty & large stretches of golden sands and appealing beachside weather in the south of France, charms all year round.
Dramatic mountain ranges give way to hilltop villages and vast plains all making for a great abundance of natural beauty & excellent skiing.
Fantastic cities that are brimming with cultural activity, including art exhibitions, music, dance, theatre and historical monuments.
Risk & Return
France represents a safe and stable economic & political environment, committed to a capitalist system with factors such as a solid infrastructure and increased accessibility to all areas of France. In addition to tax advantages and stability in capital appreciation, France is an appealing country in which to invest. France’s property market is well established & membership in the G8 group as a world leading economy, gives France that leading edge to reassure purchasers of a stable investment.
Constant and sustainable growth in the region of 10% per annum and strong rental yields of around 7-10% per annum gross make France a stable arena for those looking for a profitable investment within a market that has a buoyant sales market and a constant demand for residential and tourist rentals. Despite growth being slower than in other emerging markets, investors choose France as a far lower risk for more cautious investment.
Foreigners can purchase real estate in France without limitations. A favorite amongst European second-home buyers, an estimated half a million British people have purchased property in France and this figure looks set to increase. The French government has prioritized an easy purchase procedure for overseas property investors to encourage offshore investment, recognising that foreign investment is a way to create durable jobs and stimulate further economic growth.
Logistical Factors
Ease of access, with close proximity to the UK and rest of mainland Europe, makes France an ideal location in which to buy a holiday home. This ease of access fuels the tourist industry as a whole and maintains the value of your property investment.
Budget airlines such as EasyJet, Thomsonfly, Flybe and Bmibaby connect most French airports to many UK and other European destinations, making it an ideal short break away. Direct flights are currently available from Air France, Easyjet and British Airways to Paris, Bordeaux, Toulouse, Lyon and Marseille. The number of smaller French airports also welcoming international flights has increased over the years and this, in turn, has opened up lesser discovered areas of France to become new hotspots with property buyers, eg. Perpignan and Montpellier airports as well as the Aeroport de Salvaza and Nimes-Garons airports. Alternatively, the Channel Tunnel and cross Channel ferries allow you to travel with your car to a number of convenient ports on France's northern shores. You are then free to explore onwards via an excellent road infrastructure linking all areas of France and the rest of the Europe.