Get the Best of Both Worlds: Use Your Ski Property and Get a VAT Rebate
Save 20% on Your New-Build Ski Property with a Commercial Lease Agreement
If the owner of a new-build ski property in the French Alps plans to rent it out when it is not in use, they will have the opportunity to recover the VAT equivalent to 20% of the purchase price. More than 80% of our clients who buy a property in the mountains choose to recover the VAT with the help of our internal team which guides them step by step through the process.
To be eligible, the property must be rented furnished on a seasonal basis with three hotel services in place, such as cleaning the property, providing clean beds and house linens, or handing over the keys in person. Our advisors will be happy to help you set up these services to meet the necessary conditions.
If you are planning to purchase a new-build ski property in France, you may be wondering how you can save money on the purchase price. One option to consider is signing a commercial lease agreement with a rental management agency. By renting your property furnished on a short-term basis, you may be eligible for a VAT refund from the tax administration.
The conditions for this VAT refund are relatively simple. In order to qualify, you must rent your property furnished on a short-term basis, and offer at least three “para-hotel” services to your tenants, such as key handover, bed and linen changing, cleaning, and breakfast delivery. Many rental management agencies in the French Alps offer flexible commercial lease agreements that allow you to use your property as you please while they manage, maintain, and rent it out on your behalf.
This VAT refund structure can be very advantageous, as it essentially saves you 20% on the purchase price of your new-build ski property. If you are purchasing a completed property, you will need to pay the full price including VAT and then get the VAT refunded to you 3-6 months after signing the agreement. If you are purchasing an off-plan property, the VAT may be taken off the price at the start of the purchase, or you may be refunded the VAT as you make stage payments for the property.
The VAT rebate is provided on the basis that you will rent your property for a minimum of 20 years. After 10 years, you may have the option to stop your rental activity, but you may need to pay back a portion of the VAT rebate you received. However, many owners choose to continue the rental activity as it is more convenient to have the rental management agency handle everything on their behalf.
How to request a VAT refund?
The VAT refund is made to the tax center where the furnished accommodation depends. As a non-professional furnished landlord, you just have to complete form 3519. This form is sent along with a RIB, your SIRET number, the notarized deed, a copy of the commercial lease and the VAT count carried out by the notary.
If you decide to sell your property before the end of the 20-year period, there are a few things to keep in mind. If the new purchaser plans to continue the rental activity, there will be no VAT to repay. If the new purchaser does not plan to continue the rental activity, you may need to repay a portion of the VAT rebate you received initially. However, it is important to note that any repayable VAT is based on the original purchase price, not the resale price. Additionally, after 10 years of ownership, any capital appreciation should more than cover the repayable VAT amount.
In summary, signing a commercial lease agreement with a rental management agency can be a great way to save 20% on the purchase price of your new-build ski property in France. While you may need to commit to renting your property for a minimum of 20 years, the convenience and potential for capital appreciation can make it a worthwhile investment.
