One of the selling points that promoters of French leaseback properties push is the opportunity for a capital gain on selling.
Now, many of you will be in the position that no-one actually wants to buy your property due to the consistently poor and unreliable management records of operators, coupled with the diluted rent if you signed a lease amendment with a decrease in the ‘guaranteed’ rent.
So, let’s see how property has been fairing in France in general and compare this with property in one such French leaseback in Languedoc. In this resort, a property purchased in 2009 for €250k now appears to be ‘fire’ selling for around €80k, about 32% of it’s original price!
You can see that this leaseback price does not reflect the overall price path of French property where price seems to be levelling out around the same point as 2009,. At all, at all!
No-one can claim that the loss in value in the French leaseback example above is related to ‘le crise economic‘ or property crash etc.
However, it is worth noting that any capital loss on a French property can be offset against any Irish capital gain you might have. You can offset against future Irish gains but not retrospectively (contact your accountant).
Before buying any similar property, look for evidence on re-sales and on price of re-sale vs original purchase price. You may find no such evidence will be forthcoming…