You are reading Buying Abroad? Here Are Two Schemes You May Wish To Avoid. You can leave a comment or trackback this post.
| M | T | W | T | F | S | S |
|---|---|---|---|---|---|---|
| « Nov | Jan » | |||||
| 1 | 2 | 3 | ||||
| 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| 11 | 12 | 13 | 14 | 15 | 16 | 17 |
| 18 | 19 | 20 | 21 | 22 | 23 | 24 |
| 25 | 26 | 27 | 28 | 29 | 30 | 31 |
Posted on December 4th, 2006 by James Alliss.
Categories: Tips.
The Brits are buying up houses all over the world, it seems like we’ve become obsessed with housing no matter where it is or how much it costs. There are two schemes you may want to avoid when buying abroad which I will discuss below.
Reversion Scheme
One option being offered to UK investors wishing to purchase in France is the Viager or reversion scheme. You pay the seller a lump sum of money upfront but don’t get the ownership rights until the seller dies. Up until this time, you get to live in the house but you pay the seller an agreed amount of money on a monthly basis.
The price of the home is fixed using a combination of the market price and mortality tables. This scheme is basically a bet on someone’s life. If the seller dies earlier than expected then you get a cheap house, if they live longer than expected then the house becomes more expensive.
Fractional Ownership Scheme
This scheme works similar to a time share. Instead of one buyer owning 100% of the house, the year is split into segments. Individuals can buy as many of these segments as they require.
The difference to this and a time share is that with a time share you just have access to the property. With the Fractional Ownership scheme you own your share in the property. This ownership may come in the form of a share in a firm that was set up to own the property or something similar. The benefit to all this is that you get to keep any capital gains made when you sell.
The big question is whether you would actually make any money?
Not only are you paying for the segment(s), you also have to pay service charges which can be very expensive. And you can only stay at the house on the time you agreed. You’re also sharing it with many others so it would never feel like your own.
In a nut shell both schemes sound like a waste of time, but it’s your money. I’m just trying to warn you about the pitfalls.
James Alliss.
0 comments.
Comments can contain some xhtml. Names and emails are required (emails aren't displayed), url's are optional.