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Cimalpes
VAT Recovery

VAT recovery

An advantage in the acquisition of your second home

Real estate VAT recovery: our analysis

The purchase of a mountain chalet or an apartment with a view of the slopes is a dream for many of us! This dream is within reach thanks to seasonal rentals and financial levers such as the property VAT recovery mechanism.

This mechanism is activated with the purchase of a new property intended for rental. It is also possible to recover VAT on the charges associated with the rental (works, rental management.) provided that additional hotel services are offered to guests.

How to recover the VAT on property?

When buying a new home

The real estate VAT rate for a second home, on plans or off-plan, is 20% of the price of the property. The only way to recover it is to make a commitment to the tax authorities to keep and rent this property for at least 20 years. In the event of early resale of the property, the reselling owner reimburses the residual VAT to the Public Treasury in proportion to the remaining years.

Example: if you buy a chalet for rent and resell it after 10 years, you must reimburse the tax authorities 10% of the value-added tax that you should have paid in the first place.

The apartment or chalet for rent does not necessarily have to be continuously rented out during this period. Thus, you can live there for a few weeks a year and rent it out when you are not staying there. In the Alps, Hautes-Alpes, and Isère, the most profitable time of year lasts from mid-December to mid-January, with a peak between Christmas and New Year's Day. Therefore, we advise you to rent out your chalet at this time to better enjoy the rest of the year.

If your ideal purchase is an older chalet, you can still benefit from tax advantages such as the reimbursement of VAT on operating costs related to your furnished rental. Old buildings often have great potential for capital gain on resale or rental. In the event of renovation or extension work, the amount of VAT linked to these developments will also be recuperable since it will fall within the scope of your para-hotel activity.

Parahotelier: the advantages of the status of non-professional furnished rental company

As a non-professional furnished rental company (LMNP), you can recover the VAT linked to the rental of your property.

To do this, the rental must be of short duration. You cannot rent your property to the same tenants for several months in a row.

You will also need to offer at least 3 of the following para-hotel services:

  • Laundry with linen provided on arrival
  • Hand delivery of the keys
  • Cleaning during the stay
  • Breakfast delivery

These services can be set up by a tourist residence or by a rental management agency such as Cimalpes. Beyond these services, we can pass on our expertise in mountain real estate and the most beautiful ski resorts. Our agency manages all aspects of the rental for you: booking, inventory, administration. Indeed, we will provide you with all the documents and invoices justifying the rental with services of your second home to facilitate your VAT declaration.

FAQ: VAT recovery on vacation rentals

How do I request a VAT refund?

The refund of VAT is made to the tax centre on which the furnished accommodation depends. As a non-professional furnished rental company, all you have to do is complete form 3519. This form must then be sent along with your bank details, your SIRET number, the notarial deed, a copy of the commercial lease, and the VAT statement made by the notary.

What are the VAT recovery deadlines?

If you have opted for progressive VAT recovery on the purchase of off-plan property, your refund will be received every six months.

If you have opted for the para-hotel scheme, the Public Treasury will send you a check within a period which can vary significantly: from 15 days to 6 months.

Why do these measures exist?

The French government has set up the VAT recovery mechanism, or rather the various mechanisms, with two objectives: to facilitate the acquisition of new properties and to encourage the establishment of additional hotel services to support employment and tourism.

How to get LMNP status?

This real estate tax exemption system is only accessible to individuals subject to a ceiling:

  1. The income from your holiday or short-term rental is less than €23,000 per year
  2. Your collected rents do not represent more than half of the income of your tax household subject to income tax.

Combine profitability & pleasure by buying in the mountains

In the Alps, it is particularly profitable to buy a second home, as your own holiday residence and to rent out during periods when it will not be occupied by its owners.

The recovery of VAT, favourable registration fees, and reduced notary fees for new builds draw a virtuous circle which today energises the entire mountain real estate sector. They encourage future owners to acquire new or old housing that they can occupy, rent and make profitable, all while diversifying their assets.

Entrust the keys to your second home to Cimalpes! Our rental management service will allow you to benefit from the same provision of services as your tenants during your stays and from flawless support. From the search for a chalet for sale to day-to-day services, our teams of mountain enthusiasts are there to transform your investment into a true pleasure purchase.

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