A sale and leaseback is usually a commercial real estate activity in which a party, often a business, sells its real estate to another party, such as an institutional investor or a real estate investment company, and then leases the property at a price and a duration acceptable to the new owner. The duration of the tenancy and the amount of rent are based on the new landlord`s financing costs, the solvency of the tenant and a return based on the new owner`s initial investment. After purchasing an asset, the owner gives a long-term agreement for the property to be leased to the seller. One of the reasons for executing a ready-to-wear is the transfer of ownership of an asset to a holding company, taking into account the value and profitability of the asset. Another thing for the seller is to get money by selling an asset in value to a buyer who may be interested in making a safe long-term investment. Leaseback is very often used in commercial aviation to recover the cash invested in the asset. Companies, for example, sell the aircraft to the renter, banks or other financial institutions that, in return, lease the assets to the companies. The company can also save taxes as soon as the asset is no longer in its possession but leased. Due to the high prices of an aircraft and engines, especially new aircraft, the liquidity of this type of leaseback is used by companies to improve their financial capacity. Add Leaseback to one of your lists below or create a new list. The practice of leaseback also extends to industry, for most industrial facilities.
A company sells some of its assets to a lessor, bank or other financial institution that, in return, leases the equipment to the company. Thus, the company no longer owns the devices, but retains their use. This commercial transaction allows companies to immediately have cash to invest in new projects. Leaseback of residential real estate has been popular in France for more than 30 years; it provides significant tax benefits. Depending on the regulations, the buyer can use the property between 1 and 8 weeks (with a maximum of 6 months per year). The French government encourages the development of such transactions in tourist areas in order to make up for the lack of rental housing. The government refunds local VAT when the property is purchased. The concept of leaseback has spread to other European countries, such as Switzerland or Spain. The properties available are studios, apartments and villas.