Loi Montagne: What the Mountain Law Actually Says About Ski Property (And What It Doesn’t)

The single biggest myth in French ski property sales is this: the Loi Montagne requires you to rent out your property. It doesn’t. Not once, not in 40 years of the law’s existence, has any provision of the Loi Montagne imposed a rental obligation on a ski property owner. Yet the myth has become so entrenched that you will hear it repeated, with total confidence, by estate agents, developers, resort sales offices and even occasionally by notaires and brokers who really should know better. This guide is the correction — what the 1985 Loi Montagne and its 2016 update actually contain, what they don’t contain, and how the confusion arose in the first place.

The Loi Montagne is foundational legislation. Enacted as Law No. 85-30 on 9 January 1985, it was the first time in French legal history that a specific geographical area was defined in law and given its own development framework. The legislation covers roughly 8,000 communes across the French massifs — the Alps, the Pyrenees, the Massif Central, the Jura, the Vosges, Corsica and parts of overseas territories — and establishes rules governing land use, environmental protection, construction standards in mountain areas, services to remote communities, pastoralism and, yes, some aspects of tourist development. What it does not do, anywhere in its text, is oblige a property owner to rent their property.

Understanding this matters because the VAT reclaim rules that actually do impose rental commitments are frequently mislabelled as ‘Loi Montagne’ by sales teams who have conflated two completely separate pieces of French law. The 20% VAT reclaim on new-build ski apartments — genuine, valuable, widely used — comes from Article 261D of the Code Général des Impôts, not from the Loi Montagne. The nine-year rental commitment attached to the VAT reclaim is a condition of the VAT rules, not of the mountain law. Keeping the two things separate is the first step to making a clear-eyed decision about whether to buy a new-build ski apartment and how to structure your ownership.

The Loi Montagne runs to approximately 100 articles and covers a broad range of mountain-specific issues. The core provisions include: a formal legal definition of mountain zones and their territorial scope, special planning rules governing construction outside existing urbanised areas (the so-called continuité de l’urbanisation principle, which requires new construction to be continuous with existing settlements rather than scattered across the countryside), protection of pastoral land from inappropriate development, dedicated provisions for the development of ‘new tourist units’ (Unités Touristiques Nouvelles, or UTN) which require specific administrative authorisation, environmental protection measures for sensitive mountain ecosystems, and obligations on the state and local authorities to maintain essential public services in remote mountain communities.

The UTN provisions are the part of the Loi Montagne most directly relevant to ski property development. A ‘new tourist unit’ is defined as any significant new tourist infrastructure — a new ski lift, a new ski area, a large new resort development, a cluster of new chalets or a significant expansion of an existing resort. Creating a UTN requires dedicated administrative authorisation beyond normal planning permission, including environmental impact assessment, consultation with local residents, and approval at the prefectural or regional level depending on the scale of the project. This is why developing a brand-new resort in France is so difficult in the modern era — the UTN framework deliberately makes large-scale new development slow and scrutinised.

The 2016 update to the Loi Montagne (Law No. 2016-1888) modernised several provisions, notably relaxing some of the rigidities around the continuité de l’urbanisation principle to allow smaller developments in certain contexts, strengthening environmental protection measures, and updating the rules around seasonal workers’ accommodation in resort areas. It also formalised certain climate-adaptation provisions, reflecting the reality that climate change is reshaping mountain economies and that legislation drafted in 1985 needed adjustment for conditions in the 2010s. Again, nowhere in the 2016 update is a rental obligation on property owners introduced.

For a prospective ski property buyer, the most directly relevant practical effect of the Loi Montagne is that it constrains new supply. Because building new resorts is difficult and creating new UTNs requires authorisation, the overall stock of French ski property is tightly regulated. This is a good thing for existing owners and prospective buyers — it protects property values on the downside by making it difficult for developers to flood the market with new inventory. The law’s effect on you as a buyer is felt primarily through the constrained pipeline of new developments, not through any obligation on how you must use the property once purchased.

The confusion between the Loi Montagne and rental obligations almost certainly arose because of the way the 20% VAT reclaim on new-build ski properties is presented by developers. The reclaim is a genuine and valuable feature of the French tax system — it allows qualifying new-build purchases to recover the 20% VAT on the gross purchase price, effectively reducing the cost of a €600,000 apartment by around €100,000 in cash terms. But the reclaim comes with conditions, and one of those conditions is a minimum nine-year rental commitment through an approved management company. This is where the ‘you have to rent’ narrative comes from.

The legal basis for the reclaim is Article 261D, 4° of the Code Général des Impôts, which defines the conditions under which a furnished rental property can qualify for the VAT recovery available to commercial tourist accommodation providers. To qualify, the property must be: entered into a classified tourist rental programme (meublé de tourisme classé or residence de tourisme), managed by a professional company providing at least three of four para-hotelier services (breakfast, laundry, reception, cleaning), let out for the full nine-year minimum commitment period, and fully furnished to a standard consistent with the classification. This is not a Loi Montagne requirement — it is a tax condition attached to a specific VAT recovery mechanism.

Crucially, the VAT reclaim is optional. A buyer who does not want to enter their property into a managed rental programme simply does not claim the reclaim, pays the full purchase price including VAT, and has no ongoing rental commitment whatsoever. The property is theirs to use as they wish — personal use, occasional family rentals, commercial rentals on their own terms, or none at all. The VAT reclaim is a tax optimisation available to buyers who want it, not an obligation imposed on buyers who don’t. Every prospective buyer should understand that they can walk into a resort sales office, buy a new-build apartment in the same development, and choose not to take the VAT reclaim.

Where the confusion becomes actively harmful is when sales teams present the rental commitment as if it were an unavoidable legal obligation (Loi Montagne-style) rather than an optional tax benefit. Buyers who accept the framing without challenge end up locked into rental programmes they didn’t fully understand, sometimes with less favourable commercial terms than they would have achieved if they had negotiated from a position of full knowledge. The correct framing is: the VAT reclaim is an opportunity that costs you 9 years of managed rental — decide whether the €100,000 reclaim is worth the commitment on your specific property and in your specific circumstances. Our buying process guide walks through how to evaluate this trade-off.

A separate but related question is what a specific ski resort can require of new construction in its boundaries. Individual resorts do occasionally impose their own local rules on new developments — typically through the PLU (Plan Local d’Urbanisme, the local urban plan) and the ZACs (Zone d’Aménagement Concerté) that govern specific development projects. These rules can include architectural constraints (traditional Savoyard styling, materials, colour palettes, roof pitches), density limits, environmental requirements, and occasionally specific zoning for tourist accommodation as opposed to primary residences.

Some resorts have, at various times, established ‘lits chauds’ policies — rules designed to ensure that a minimum proportion of new development is let out commercially during the ski season rather than left as cold beds owned by absent owners. These policies are imposed at the local commune level and typically apply to specific development projects rather than to all property owners in a resort. They can involve subsidies or planning incentives rather than outright obligations, and their effectiveness has been mixed — the French court of auditors has been critical of lits chauds policies in several reports, noting that most of them fail to achieve their stated goal of increasing occupancy.

A buyer looking at a specific new development should ask the developer directly whether the project is subject to any local lits chauds commitments, whether those commitments apply to the purchaser or only to the developer, and whether there are any ongoing obligations attached to individual apartments in the development. The answer is almost always ‘no’ for ordinary new-build ski apartments — the lits chauds framework is typically applied at the project approval stage rather than passed through to individual owners — but it is worth confirming rather than assuming. A properly drafted reservation contract will spell out any such obligations in plain terms.

Where you will occasionally encounter genuine ongoing obligations is in projects structured as ‘residences de tourisme classées’ — classified tourist residences, which are a specific legal category of development where the entire building is operated as a managed tourist facility. Buyers in a residence de tourisme do typically sign up to managed rental commitments as part of the purchase, because the entire building’s tourism classification depends on it. This is a specific legal category, not a general rule, and any apartment for sale in a residence de tourisme should be clearly marked as such. A normal new-build apartment in a resort is not a residence de tourisme unless explicitly labelled as one.

The practical question is why the Loi Montagne myth has become so durable given that it’s demonstrably incorrect. Part of the answer is institutional: many sales teams are trained on scripts developed decades ago that conflated the VAT reclaim rules with the Loi Montagne terminology, and the scripts were never updated. The training documents, the brochures and the website copy all echo each other, and new sales staff absorb the incorrect framing on day one. Correcting the myth would require a resort-wide effort by developers, sales agents and brokers — and there is limited incentive for any individual actor to invest in that correction, because the myth typically pushes buyers towards the rental programmes that generate fees for the developer, the rental operator and the sales agent.

A secondary explanation is that the Loi Montagne sounds authoritative. A buyer hearing ‘the law requires you to rent the property’ accepts the claim more readily than a buyer hearing ‘you can save 20% VAT if you agree to rent the property for nine years.’ The first framing implies no choice; the second makes the trade-off explicit and invites the buyer to evaluate whether the VAT saving is worth the commitment on their specific circumstances. From a pure sales-conversion perspective, the Loi Montagne framing is more effective — which is exactly why ethics and clear information matter so much in this market.

The correct approach for a buyer is to treat any claim that ‘the Loi Montagne requires’ or ‘French law requires’ you to rent out your property as a red flag that deserves specific investigation. Ask the sales agent to point you to the exact article of the Loi Montagne, the exact article of the CGI or the exact provision of the PLU that imposes the obligation they’re describing. In almost every case the answer will be that they are referring loosely to the VAT reclaim conditions under Article 261D CGI — which is an opportunity rather than an obligation. Once you’ve established that, you can decide clearly whether the reclaim is worth pursuing on your specific transaction.

None of the above means that French ski property ownership is entirely unconstrained. There are several genuine legal constraints that buyers should understand, separately from the non-existent Loi Montagne rental obligation. First, the property itself is subject to the standard French property taxes — taxe foncière and taxe d’habitation sur les résidences secondaires. Taxe d’habitation was largely abolished for main residences in recent reforms but has been reintroduced for second homes in high-demand communes, including most ski resorts. Expect €600–2,000 per year depending on the commune and property size.

Second, any rental activity — whether formal or informal — triggers French tax on the rental income. Even a buyer who does not take the VAT reclaim can still rent their property out and will be taxed under the French furnished-rental regime (LMNP / BIC), which offers generous deductions for depreciation and costs but does require annual tax filings. UK-resident landlords will then fold the French-source income into their UK self-assessment return under the UK-France double tax treaty, with French tax paid creditable against UK liability. This is a routine framework that applies whether or not you take the VAT reclaim.

Third, new construction and significant renovations are subject to RE2020 environmental standards, which impose stringent insulation, heating and carbon requirements on all new building projects in France. This is not a Loi Montagne issue per se — RE2020 applies nationally — but it does materially affect the construction costs and specification of new-build ski apartments, and explains part of why new-build prices have risen sharply in the last few years. The energy performance ratings (DPE) required by RE2020 are stringent enough that older properties not meeting the standards face increasing restrictions on rental if they do not meet minimum DPE thresholds.

Fourth, the loi Climat et Résilience (Law on Climate and Resilience, 2021) imposes phased restrictions on the rental of properties with poor DPE energy ratings. From 2025, G-rated properties cannot be let commercially; from 2028, F-rated; from 2034, E-rated. This applies to all rental properties in France, not just mountain ones. Buyers looking at older resale ski apartments should check the DPE rating before committing, because a property rated F or G may need significant insulation upgrades to remain lettable through the 2028+ window. Our French mortgage calculator includes a budget line for renovation costs where relevant.

With the Loi Montagne myth out of the way, buyers can evaluate rental commitments on their actual commercial merits. The core question is: is the 20% VAT reclaim worth the nine-year rental commitment? For most new-build ski apartments, the answer is yes — €100,000 recovered on a €600,000 apartment is a meaningful improvement to the investment case, and the nine-year commitment is consistent with the typical long-term holding period most buyers would adopt anyway. The commitment does constrain personal use (typically to 4–8 weeks per year depending on the contract terms), but many buyers are happy to trade unlimited personal use for the cash recovery and the professional management that comes with it.

For buyers who want unconstrained personal use, the right path is to not take the VAT reclaim and pay the full purchase price including VAT. The property is then yours to use as you wish, rent out on your own terms through platforms like Airbnb, or leave unused. Notary fees on new-build are still at the favourable 2–4% rate rather than the 7–9% that applies to resale, and all the other advantages of new-build (RE2020 compliance, modern specification, developer warranty) remain in place. The only thing you give up is the cash VAT recovery.

For buyers who want partial flexibility, some developers now offer hybrid arrangements — a partial VAT reclaim with a shorter rental commitment period, or a managed rental programme with negotiated personal use allowances that exceed the standard 4–8 weeks. These hybrid arrangements are less standardised and require careful negotiation, but they can produce outcomes that better match a specific buyer’s actual usage pattern. The Domosno team is experienced at negotiating these trade-offs on behalf of British buyers and can introduce you to developers who offer genuine flexibility rather than rigid template contracts.

To summarise: the Loi Montagne is a genuine and important piece of French legislation governing development, environmental protection and services in mountain areas. It does not impose any rental obligation on ski property owners, has never imposed any such obligation since its enactment in 1985, and does not contain any such provision in its 2016 update. The confusion arose because the VAT reclaim rules under Article 261D of the French tax code impose a nine-year rental commitment as a condition of VAT recovery, and sales teams have long conflated this with the Loi Montagne framing for reasons that are more institutional than malicious.

The practical takeaway for buyers is this: treat any ‘French law requires’ claim with informed scepticism, ask for the specific legal reference, and make rental decisions on their actual commercial merits rather than under a false sense of obligation. The 20% VAT reclaim is a genuinely valuable tax optimisation that suits many buyers well — but it is an opportunity to evaluate, not an obligation to accept without challenge. The new-build ski apartment market in France is large enough and varied enough that buyers with almost any preference profile can find properties and structures that match what they actually want.

Our final advice is always the same: ask direct questions, expect clear answers, and walk away from sales pitches that rely on unchallenged claims of legal obligation. The French ski property market is a serious, sophisticated market with genuine opportunities for the prepared buyer — but like any serious market, it rewards informed participation and punishes uncritical acceptance of received wisdom. If you’d like help evaluating a specific opportunity or navigating the VAT reclaim decision on a particular development, the Domosno team has been active in the French Alps since 2005 and is happy to talk through the specifics of your situation.