Q. Why is there a VAT discount offered on the purchase price?A. The discount stems from tax breaks given to developers by the government to encourage them to build "Residence de Tourisme" projects. This is then passed down to purchasers as an incentive to enter into the scheme.
Q. What happens at the end of the 11-year lease?
A. As the freehold owner you can choose to sell, use or let your property whenever you wish. Alternatively you can renew the lease. With the latter option, the terms of the lease will be discussed (duration, weeks of use, rental income, service charges...).
In some resorts in the Alps, the town council requires the owner to renew their lease (usually for an extra 9 years). Please ask for details.
Q. What happens if I need to sell before the end of the 11-year term?
A. As you are the freehold owner you can sell whenever you choose, and you would be selling the property with whatever period is remaining on the lease. The term remaining on the lease would have to be taken into account in the selling price.
Q. Does the Leaseback scheme work in the same way as time-share?
A. With time-share all you are purchasing are periods of time, which you can use within a given number of locations over a set term. Once the term has expired you own nothing.
Under Leaseback you are the freehold owner of the property from day one and all you have done is entered into an 11-year lease.
Q. Who pays the bills during the 11 years?
A. The management company pays for the upkeep and maintenance of your apartment along with all the utility bills. You would still have to pay a fixed part of the annual service charges and the "Taxe foncière".
Q. Will I get the use of my own apartment during my allocated weeks?
A. This will happen as long as you book on time (end of August for the winter weeks and mid February for the summer weeks); otherwise it will be an equivalent property.
Q. If I can not use all of my weeks during a year can I sub-let any that are remaining?
A. NO. However CGH offers to let the weeks you do not wish to use and pay you a percentage (typically 60%) of the rental income received. CGH can not however guarantee to rent the weeks you give back, as it obviously depends on demand. Generally friends & family can use your weeks but you need to check with the management company.
Q. If I take the lease with rental income, is it guaranteed, and when is it paid?
A. With the Option 1 with guaranteed rental income, the income is indeed guaranteed throughout the 11-year lease and is paid twice a year in arrears of the season, usually in early May and November.
With the FLEXI option, the income you receive depends on the use you have of the property. It is paid once at the end of the financial year (when the value of your occupation weeks has been deducted.)