As well as an incredible lifestyle investment, buying a ski property in the French Alps can also be a great way to generate rental income.
New for 2020, this guide outlines how to rent out your property in France and how to be eligible for the French property VAT rebate scheme which allows new-build property owners to save 20% VAT if they decide to place their holiday home on the rental market year-round.
If your property is still in the building phase, it’s best to consult an expert who may give you advice relevant to your particular property. Saying that, here are some general tips to help you prepare to rent out your property in the French Alps.
When renting your home in the French Alps whilst taking part in the property VAT rebate scheme, there are regulations that must be followed and their exact rules will be determined by the management agency that you partner with.
For guests, you must:
Furthermore, in order to be eligible for the property VAT rebate programme, you must sign a contract of at least three years with a rental management company.
Yes, you may stay in your own property and still reap the benefits of the VAT rebate scheme but we advise speaking with your rental management agency to understand their guidelines. Your agency may suggest a limited number of weeks of which the homeowners may occupy a property and when doing so, you may be asked to pay for the three services and, depending on your contract, you may be asked to pay commission during your rental period.
When your friends and family stay at your property, they must use your home as any other guest would. This means that they should use three services and pay a nightly rate. It’s important to note that both your agency’s commission and the state’s 10% vat will apply to their stay.
When you own and rent out a property in the French Alps, you will need to take into account the one-off fees and running costs outlined below:
There are other costs which may be invoiced to you, however, they are payable by guests including:
A rental management company may charge between 25-30% (+ VAT) of the nightly rate that guests pay. This fee should cover:
It’s important not to confuse property management with rental management. Oftentimes, agencies may assist you to perform various tasks in your property such as checking the post, handling handymen, ordering replacement items and placing them on site, but these may be charged as extra either through ad hoc fees or as monthly payments.
You may claim back VAT on all services relating to your property, providing they have been offered by a French company, as long as you are adhering to the VAT guidelines. This includes utilities, rental management, handyman services, and so on which are charged at 20%.
You may not claim back VAT from the 10% due on the nightly rate.
Your rental agency will be able to advise regarding the value of your nightly rate based on market comparisons. Winter, ski-season pricing is normally based on varying tiers of seasonality, with key weeks including Christmas and New Year, winter break in February and the Easter holidays
It’s important to bear in mind that properties may take two to three seasons to reach their full potential. When properties first join the rental market, they do not have reviews or return bookings so the nightly rate and occupancy will start at a lower point and gradually work its way upwards.
Winter is peak season in all of the French Alps resorts, though some resorts may enjoy busy summer seasons as well. You may expect summer pricing to be in the range of the low-period weeks during the winter months.
During the winter you or your agency may require a minimum of seven nights’ stay, with check-in and check-out on a designated day. Note that not all agencies work this way though, with some agents offering flexibility to maximise bookings with more turnover.
During the summer, agencies may be more flexible regarding minimum stays with three to five nights being the norm.
The industry has many terms and norms linked to it which homeowners may not be familiar with prior to renting out a home in France. We explain them below:
Disclaimer: The advice provided by Athena Advisers is for general information only, and we recommend speaking with legal advisers and your rental management agency for more details. Athena Advisers may not be held liable for the VAT regime, including the right to any deductions, nor may Athena Advisers be held liable for any tax reassessment carried out against the owner.
Regarded as one of the world's premier winter sports destinations, The French Alps spans 8 adjoining mountain chains that rise up from Provence in the South and across the borders of Switzerland and Italy. Spread across 210,000 kilometres, they combine some of the world's most dynamic ski destinations with an adventure sports scene fast on the ...