For those investing in Alpine real estate, the 20% VAT rebate on new build properties in France represents a significant financial advantage. This government-backed incentive is designed to encourage property investment with a rental component, and it has become a favored choice for buyers seeking both personal enjoyment and income potential from their Alpine homes. In this blog, we’ll break down the rules and benefits of this scheme and guide you through what you need to know to make the most of it.
What Is the 20% VAT Rebate?
The VAT rebate allows buyers of new build properties in France to reclaim the 20% VAT (Value Added Tax) included in the purchase price. To qualify, buyers must agree to rent out the property on a short-term basis to tourists and offer specific services during their rental periods. This rebate can significantly reduce the overall cost of the property, making it an attractive option for investors.
Key Rules for Eligibility
To benefit from the VAT rebate, buyers must meet certain conditions:
Rental Commitment:
The property must be rented out on a short-term basis (less than 31 days per stay) for at least 20 years. However, there are flexible options to exit this commitment under certain circumstances.
Touristic Services:
Owners must provide at least three of the following four services to guests:
- Breakfast service
- Cleaning of the property during the stay
- Provision of linens (e.g., towels and bed sheets)
- Reception services (such as a concierge or front desk)
Professional Management:
The rental activity typically needs to be managed by a professional company specializing in tourism rentals. This ensures compliance with French rental regulations and simplifies the process for owners.
Registration Requirements:
The property must be registered with the relevant authorities as a furnished tourist rental to qualify for the rebate.
Timing of Application:
Buyers must apply for the VAT rebate before the delivery of the property. It is crucial to work with professionals familiar with the process to ensure timely and accurate submission.
Advantages of the VAT Rebate
Significant Savings:
Reclaiming 20% of the purchase price can amount to substantial savings, often equivalent to hundreds of thousands of euros on luxury properties.
Income Generation:
By renting out the property, owners can generate rental income to offset costs and even create a profitable investment.
Personal Use Flexibility:
Owners can still use the property for personal stays when it’s not rented out, offering the perfect balance between investment and leisure.
Boosted Property Value:
Properties eligible for the VAT rebate are often located in high-demand areas, ensuring strong rental potential and long-term value appreciation.
Professional Support:
Many developers and property management companies offer end-to-end assistance with the VAT rebate process, simplifying the administrative burden for owners.
Steps to Apply for the VAT Rebate
Work with Experts:
Collaborate with your developer and a professional rental management company to ensure compliance with all requirements.
Prepare Documentation:
Submit the necessary paperwork, including proof of the rental agreement and service offerings, to the relevant authorities.
Monitor Compliance:
Keep records of rental activities and services provided to maintain eligibility throughout the rental commitment period.
Is the VAT Rebate Right for You?
The VAT rebate is an excellent option for buyers looking to maximize their investment while enjoying personal use of their Alpine property. However, it requires a long-term commitment to the rental model and adherence to the outlined rules. Before deciding, it’s essential to assess your goals and consult with professionals to understand the implications fully.
At EVEREST Developers, we specialize in guiding our clients through every aspect of Alpine property investment, including navigating the VAT rebate process. Contact us today to learn how we can help you make the most of this incredible opportunity.mailto:client@mon-everest.com