The 20% VAT Reclaim on New-Build Ski Properties in the French Alps: A Complete 2026 Guide

Almost every buyer who gets serious about a French ski apartment eventually hears about the ‘20% VAT reclaim’. On a €600,000 apartment that sounds like €120,000 of free money — and in a sense it is, though the full picture is more interesting than the headline. The French new-build VAT recovery scheme is a genuine and valuable feature of the market, but it comes with specific rules, a minimum rental commitment, and some maths that need to be understood properly before you sign anything. This guide walks through all of it.

The short version: if you buy a new-build (VEFA) ski apartment, enter it into a classified managed rental programme, furnish it, and commit to keeping it in the programme for a minimum of 20 years (with a 9-year ‘safety clause’), you can recover the entire 20% French VAT that’s baked into the headline purchase price. That refund typically arrives in tranches during the first 6–12 months after completion and reduces your effective purchase price by a sixth (20% of 120% = 16.67%). For a €600,000 TTC apartment, the reclaim is €100,000 — enough to meaningfully change the investment calculus.

The longer version involves understanding what a classified meublé de tourisme is, how the LMNP furnished-rental tax regime interacts with the VAT scheme, what happens if you resell early, which developments qualify, and how the rental programme affects your personal use of the apartment. We’ll cover each of these in turn, including a full worked example at realistic 2026 prices. The aim is to give you enough detail to have an intelligent conversation with a French notaire — not to replace that advice, but to make sure you’re asking the right questions.

France applies a standard VAT rate of 20% on new-build residential property sold under the VEFA (Vente en l’État Futur d’Achèvement) off-plan contract. The headline price on a developer’s brochure is the TTC price — toutes taxes comprises, all taxes included — which means the 20% VAT is baked into the figure. The underlying ex-VAT price is the HT figure — hors taxes, before tax. For an apartment with a TTC price of €600,000, the HT price is €500,000 and the VAT portion is €100,000. These three numbers are what you need to keep track of through the whole transaction.

The reclaim scheme exists because France uses its tax code to incentivise professional short-term rental accommodation in tourist areas. A private second home does not qualify — but a classified tourist rental (résidence de tourisme classée) does, because from a tax perspective it is operating as a commercial hospitality business. The buyer recovers the 20% VAT, and in exchange the property must genuinely operate as a rental asset for a meaningful commitment period. The scheme has existed in various forms since the 1980s and is a well-established part of the French ski-property market.

The commitment period has two layers. The headline rule is that the apartment must be rented out through a classified managed operator for at least 20 years to keep the full VAT reclaim permanently. The practical rule (and the one most buyers focus on) is that if you withdraw from the rental programme before 20 years, the VAT reclaim is prorated back — each year of shortfall costs you 1/20 of the recovered amount. At year 9 you still owe roughly 55% of the original reclaim if you exit entirely, so most advisors frame the scheme as a ‘9+ year commitment’ rather than 20.

Three conditions must be satisfied simultaneously for the VAT reclaim to apply. First, the property must be new-build — a VEFA off-plan purchase or a resale of a new-build within five years of first occupation still carries VAT. Existing resale properties (older than five years or previously owned by a private individual) do not, so there is no reclaim available on them. Second, the development must include at least three of the classified ‘para-hotel’ services: reception, breakfast, linen change and cleaning. Fourth-star résidences de tourisme are the most common format and they all include these services as standard.

Third, the buyer must enter the apartment into the managed rental programme operated by the residence (or an approved alternative operator). The owner signs a commercial lease with the operator, typically for 9–11 years, in which the operator guarantees rental income and takes responsibility for bookings, housekeeping, maintenance and guest services. The owner retains the right to use the apartment for a specified number of personal weeks per year — typically 6–8 weeks, including 2–4 peak weeks — depending on the operator’s terms. This is a negotiable part of the contract and worth paying attention to.

Non-residents, including British buyers, are fully eligible for the scheme on the same terms as French residents. There is no nationality restriction and no special residency requirement. The only practical difference is that overseas buyers need a French bank account to receive the VAT refund, and a French accountant to file the annual LMNP tax return (of which more below). Both are standard requirements and easily arranged through the same specialists who manage the rest of the transaction.

Let’s work through a realistic example. Suppose you buy a two-bed VEFA ski apartment in Morzine at a TTC price of €600,000. The HT (ex-VAT) price is €500,000 and the VAT portion is €100,000. Under the reclaim scheme you pay the full TTC price at completion — €600,000 to the notaire — and then receive the €100,000 VAT refund from the French tax authority some months later, typically in staged payments. So your effective out-of-pocket cost is €500,000, or 16.67% below the brochure headline.

On top of that, notaire fees on new-build VEFA are approximately 2–4% of the HT price (versus 7–9% for resale), so budget around €12,000–20,000 for completion costs. A non-resident mortgage at 70% LTV on the HT figure is €350,000, leaving a €150,000 down payment plus fees from cash. At a current fixed rate of around 3.6% for a 20-year term, the monthly mortgage payment on €350,000 is approximately €2,050. Add €300–500/month for insurance, taxes and service charges, and the all-in monthly holding cost is roughly €2,350–2,550.

On the revenue side, a well-positioned managed two-bed in Morzine typically generates €30,000–40,000 in gross annual rental revenue before the operator’s commission. Net of the 20–25% management fee, property taxes, co-ownership charges and owner weeks, the net rental income to the owner is approximately €18,000–26,000. That translates to a net yield of 3.0–4.2% on the HT price or 2.5–3.5% on the TTC price. The margin between the net rental income and the monthly mortgage + costs is typically small or slightly positive in year one, growing as the mortgage balance amortises and rental rates escalate with inflation.

The second pillar of the new-build scheme, after the VAT reclaim itself, is the LMNP regime — Loueur en Meublé Non Professionnel, or non-professional furnished rental landlord. Under LMNP, rental income is taxed as industrial and commercial profit (BIC) rather than as standard rental income. Crucially, the BIC regime permits depreciation of the property and its contents against rental income for tax purposes, which for most owners means rental income is essentially tax-free for the first 15–20 years of ownership.

The depreciation mechanics are straightforward: the building element of the property (typically 85–90% of the total value) is depreciated straight-line over roughly 25–30 years, the fittings and furniture over 5–10 years, and the land element (10–15%) is not depreciated. The total annual depreciation charge is deducted from the gross rental income, along with mortgage interest, management fees, insurance and local property taxes. In almost every realistic scenario, the result is that the net taxable income under LMNP is zero or negative for at least the first decade.

This matters because it means the French tax authority taxes very little of the rental income during the mortgage years. British buyers are required to declare the income on their UK tax return under the worldwide taxation rules, but the double-taxation treaty between the UK and France credits French tax paid (which, under LMNP, is typically zero), and the UK calculation is based on the same depreciation-allowed net figure. The effective long-run tax rate on a well-structured LMNP investment, for most British buyers, is materially lower than an equivalent UK buy-to-let. Our French mortgage calculator includes LMNP-aware net income modelling for the typical scenarios.

No tax scheme is risk-free, and the VAT reclaim is no exception. The main practical risks fall into three categories. First, operator failure: the classified managed operator might go bankrupt, in which case the owner needs to find a replacement operator (or take over management themselves, which risks the VAT reclaim). This has happened several times in the French residence market and buyers should look carefully at the operator’s financial covenant and track record before signing.

Second, unfavourable commercial lease terms: the commercial lease with the operator is the legal document that governs rent payments, owner use, repairs and renewal. A bad lease can significantly erode the economics of the investment. Pay particular attention to the rent indexation clause (how annual rent increases are calculated), the guaranteed-rent versus revenue-share structure, and the operator’s right to deduct major works from owner income.

Third, early exit penalties: if you sell the apartment in year 5 to someone who doesn’t want to continue in the managed programme, you repay 15/20 of the VAT reclaim. If the new buyer commits to continue the scheme, the reclaim transfers with them and no repayment is due. This is why in the secondary market VEFA-reclaimed properties tend to trade within the same buyer pool — managed rental to managed rental — which can narrow the resale buyer base somewhat. Our buying process guide walks through the full legal checklist step by step.

Yes — this is one of the most misunderstood aspects of the scheme. Entering a classified managed rental programme does not mean giving up personal use. Standard operator contracts typically allow 6–8 owner weeks per year, including one or two high-season peak weeks, distributed across the calendar in a way that balances owner lifestyle with rental availability. The owner books these weeks in advance through the same reservation system the operator uses for guests.

The tax implication is that weeks used personally are notionally ‘valued’ at market rent for the purposes of the VAT pro-rata calculation — meaning if you take extensive personal use, the effective recovered VAT is slightly reduced. For most owners taking the standard 6–8 weeks, this adjustment is minor and factored into the operator’s rental yield figure from the start. For buyers who want extensive personal use — say, 12+ weeks per year — the VAT scheme becomes less efficient and a straight private purchase (forgoing the reclaim) may actually be better value.

The honest test is to ask yourself how many weeks you will actually use the property. British buyers typically over-estimate this — most buyers who plan on 10+ weeks end up using 4–5 in practice, because work, school and other commitments intervene. If you genuinely want a second home you live in for three months a year, the VAT scheme is probably not the right structure. If you want a rental asset you use for 2–3 weeks a year, the scheme is excellent.

The practical buying process is the same as any other VEFA purchase with the addition of the commercial lease signing. Steps in order: (1) reserve the apartment with the developer via the initial reservation contract (contrat de réservation) with a 5% deposit held in escrow; (2) sign the preliminary lease agreement with the managed operator; (3) sign the deed of sale (acte authentique) at the notaire on the completion date; (4) submit the VAT reclaim application to the French tax authority in the weeks following completion; (5) receive the refund in tranches over the subsequent 3–12 months.

Throughout the process, the buyer will need a French bank account, a French accountant (for ongoing LMNP returns), and certified translations of any key documents into English if requested. Our team helps British clients with all of the above as part of the standard buyer service — the typical VEFA transaction takes 18–30 months from reservation to completion, reflecting the staged construction payment schedule. For an introduction to the current new-build ski apartment inventory, our page lists every active VEFA development across the French Alps, and our Domosno team can walk you through specific developments in detail. Get in touch via our contact page to start a conversation.

One final note on timing. The VAT reclaim scheme is a long-standing feature of the French tax code and has survived multiple changes of government. It is occasionally rumoured to be ‘about to change’ but the scheme has been stable for over three decades and is an integral part of how the Alpine residence market funds new construction. Buyers can plan with a high degree of confidence that the scheme will still exist in its current form at the end of the typical 18–30 month construction period.