This system was introduced in France in 1986 by the Government to increase the supply of quality accommodation for tourists in regions with high tourism potential.

Tourism residences are for seasonal letting (usually on a weekly basis) and offer a whole variety of extra services, such as a reception, breakfast, cleaning, bed linen, and also swimming pool, sauna, jacuzzi, hammam, sport room, tennis courts..

Serviced Residences are part of this tax scheme. They are generally located in the town centre to accommodate students, business people or else, they may be Accomodation Establishments for Elderly Dependent People (EHPAD).

This system enables purchasers to buy a property (and therefore have full ownership) guaranteeing them a rental income over a period from 9 to 12 years, which can be renewed.

The property is handed over to a Management Company that sub-lets the units, and pays the owners a predefined and guaranteed counterpart income (usually every quarter).The main advantage of this system is to own a property that provides a guaranteed rental income, but where the property is entirely managed by a third party (the management company operating the residence).

Depending on the case, the owner may also benefit from free occupancy of his appartment for a number of weeks, or to have a “holiday time allowance” in the residence, or even in another residence managed by the same management company. This personal occupancy may not be guaranteed (in general in student residences or in EHPAD).

The rental income received represents on average a yield level ranging from 2.5 to 6% per year. Generally, the less the personal occupancy, the greater the yield. .

In addition, this system enables purchasers to be refunded from the VAT on their purchase, representing an immediate gain of 19.6% (for new property) on the purchase price. The VAT may be paid by the property developer or by the purchaser. In the latter case, the refunding is made a couple of months following the actual delivery of the residence.

Depending on the tax status of the residence (LMNP or Demessine), the property is either acquired furnished, or unfurnished (in which case it will be furnished by the management company).

Given that the property is situated in a tourism residence, all the units must have the same furniture and finishing. The purchaser will not be given a choice of tiling or wallpaper… However, the management company that runs the residence will be responsible for maintaining the furniture and the apartment.Only co-ownership charges and the “taxe foncière” (land tax) will have to be paid by the owner.

The vast majority of tourism residences are sold off plan, and the purchasers generally pay reduced notary fees.

Purchasers whose tax household is in France may benefit from additional fiscal advantages; this explains why tourism residences sell so quickly in general.

2) The Buy to Let scheme (Robien or Borloo)

In this system, the purchaser buys a property that will be let as a main residence to private tenants.

Management of the property (search for and management of tenants, day to day management, and payment of rent) is guaranteed by a management company with which the owner signs a management agreement.

Personal occupancy is not possible for the owner for the duration of the management agreement.
The property is purchased and let unfurnished.

The payment of rent is guaranteed, but not the amount, which will depend on the local market (supply / demand). However, a certain number of additional guarantees are offered to the owner, including the guarantees are offered to the owner, including the guarantee of rents even if the apartment is vacant, a guarantee on repair costs if any damage is caused by the tenants and a guarantee to find the first tenant for you.

The management agreement is generally signed for a period of 9 years, after which the owner can retrieve their property for their own personal use. This is particularly advantageous for purchasers who wish to occupy their property as their primary residence or as a second home when they retire, for example. For 9 years, the owner will pay off part of the investment, thanks to the rental income received.

The rental income is generally paid on a monthly basis by the management company.

The property is acquired all taxes included, and no VAT is to be reimbursed.

The average yield varies between 2.5 and 5.5% per year.

The developments sold off plan are subject to a reduced rate of notary fees.

These developments are generally situated in places where there is a high rental demand, and are therefore not limited to so-called tourist areas.