THE CONTRACT & TAX INCENTIVES
Another key difference in the way we manage our properties compared to other holiday residences with an onsite management company is that they almost always require you to sign a commercial lease, either with a variable or fixed rental income which both restricts your personal use and dictates when you are permitted to use your own property but you are also tied into this agreement for 20 years. If the management company are not performing as you’d like them in the first couple of years it can then be very difficult to replace them. We don’t think that’s right and feel that the owner should always be the one in charge of his own property and that is why we leave it in the hands of the owner as to when he/she wishes to use the property and when he/she wishes to rent it out. So instead of a commercial lease owners instead are given the OPTION to sign what is called a “mandat de gestion” (rental management mandate). Under this system the owner stays in full control of the property and just pays a commission on the weeks the management company rents out. As we provide quasi-hotel services on site owners also have the option of having the VAT (typically 20%) reimbursed on the purchase price so long as he doesn’t occupy the property for more than 6 months per year and makes it available for rent for several weeks during the tourist season. Not only that but there are other significant tax advantages under this system which allow you to offset 90% of the price of your property against rental income so that very little on zero income tax is due.
Owners may also live in the property all year round or just use it themselves as a second home when they wish. They are under no obligation to rent their property out if they do not wish to do so.