I recently had a quick e-mail exchange with Steve Navaro, founder of Paris Home Shares LLC
Steve’s company specializes in true fractional ownership schemes in Paris. Two luxury schemes have been completed and another is in progress. All schemes are properly structured with regard to the peculiar (by US/UK standards) French taxation laws. Take a look at the available properties on his website or see summary information on Fractional Ownership News
March 31, 2008 at 4:42 pm
Hi Neil,
Thanks for the nice words. You are doing a good job explaining a relatively new concept. It is so important to get the details right, because the market for fractional ownership encompasses buyers from around the world, each unfamiliar with the laws of other countries. In the case of France, the laws are particularly complex, as they are based not on common law, but on the Napoleanic code. Therefore a proper structuring of any scheme must take this into consideration.
One example, in my opinion, of how things can go wrong quickly, is the use of fractional property as a vehicle to obtain rental income. In France, it is my belief that this constitutes a foreign business venture, subjecting the scheme and its Owners to France’s business tax. In our projects, we target solely to 2nd home owners who do not want or need the hassle of rental income and the mangement of tenants that comes along with it. In fact, we strictly prohibit any rental of the property to 3rd parties. I am sure that we lose some of our market by taking this position, but from a tx liability standpoint, it is the most prudent and judicious course to take for our Owners.