Posted on January 30th, 2009 in The property market in Le Marche | No Comments »
Fractional Ownership – a new way to own property in Le Marche
Fractional Ownership has been around a long time, especially in the USA where it is a multi-billion dollar industry, but most people in Europe are just becoming familiar with this approach to buying and owning property. It is a very simple and cost effective way of owning a second home without all the hassle and cost of running and maintaining it.
This method of ownership allows the consumer to buy a part share in an asset (the property) that would otherwise be outside their budget.
Buying a fantastic 4 bedroom, renovated, fully furnished farmhouse with a large swimming pool, tennis court, vineyard and magnificent views, in Italy, is out of most people’s reach but buying just a few weeks in that property suddenly makes it much more accessible!
You are able to buy the number of weeks you will actually use annually, not have a house that is likely to sit empty for most of the year. Your budget goes so much further when buying through Fractional Ownership, and you only pay your portion of the running costs while having someone else oversee the maintenance and management of the property. The headaches of buying and owning a second home outright are removed. You get all the enjoyment of owning your own second home without all the hassle.
Some often used phrases to describe fractional ownership are ‘multiple parties owning an asset’ or ‘shared ownership of an asset in perpetuity’. This differs from ‘time share’ in that the asset is actually owned by you, rather than having just a right to use time in a development for a limited period. You have the right to sell or gift your share in a fractional ownership development and it could appreciate over time. A share can be purchased in the name of an individual, jointly, through a company or a trust structure.
There are a number of ways of structuring a fractional ownership development; one method is to have a UK based company own the property. There are 52 shares corresponding to the number of weeks available. Clients can buy as many shares as they wish and time will then be allocated in the property to correspond to the shares purchased. In simple terms ‘the company owns the property, the shareholders own the company’. By structuring this way you are able to avoid the normal legal and tax issues associated with purchasing a property outright in Italy. Appassionata have handled all of these complexities and costs when originally purchasing the property through the UK Company.
To ensure that all owners get equal access and use of the properties throughout the years of ownership there is a Rotating Residency Calendar (RRC). This calendar will move your weeks each year so that you will enjoy all the seasons. The calendar is published in advance and weeks can be swapped between owners. Owners who purchase 3 or more weeks of ownership will be able to link two of those weeks together on the same rotating basis. This is the fairest way of assigning weeks and the starting point will be allocated on a first come first served basis. Two weeks of the year will be held in ownership by the developing company for maintenance purposes and where possible to assist owners to swop weeks.
The properties will be fully furnished to a very high standard, as you would your own home, they will not look like holiday rentals. The aim is to attract an affluent, aspirational customer who wants to share in something they cannot buy outright. To be able to say ‘I own a country house in Italy with a swimming pool, tennis court and its own vineyard’ is true, whether you own one or more weeks.
Finding an amazing location is also part of the development process. Le Marche is situated on the east coast forming the calf of Italy. Set against a mountain backdrop with a picturesque landscape of vineyards and olive groves dotted with small farms and medieval hill top villages. There is a wonderful coastline with lovely sandy beaches only 15 minutes drive away. This is authentic Italy, untouched by mass tourism and extremely welcoming to foreigners.
The first project will be launched in the spring of 2009.
To further explore the opportunity of fractional ownership please conatct David Parish at firstname.lastname@example.org