Buy New-Build and Save 20% on the purchase price

All new-build property in France contains 20% VAT included in the price. The VAT can be recaimed from the tax administration if you are planning to rent your property furnished on a short term basis with rental services. This creates a very significant saving on the purchase price and is paid as a lump-sum after the completion of the porperty purchase. 

The letting activity is considered as commercial activity allowing you therefore to claim the VAT.

The conditions are:

  • you need to rent your property furnished
  • on a short term basis (holiday lets of corporate lets for example)
  • at least 3 ‘para-hotel’ services have to be offered to the tenants i.e. reception (handover of the keys), bed and linen changing, cleaning & breakfast (it can just be a breakfast delivery – our property managers assist with all of these services)

The property management company will take care of the rental of your property and the property is 100% yours and you can use your property as you wish. Many investors are capitalising on this excellent incentive when purchasing their French property investment/second home as a medium to long-term investment.

The VAT rebate is provided on the basis that the property is being rented over 20 years, which means that you need to be planning to rent your property out for at least a few weeks each year and have the correct type of rental management contract (please contact us for full details)

You can choose to stop renting the property out but you may need to repay some of the rebate that was paid to you to encourage you to rent your property to holiday makers or corportate/short-term tenants for at least some of the year. No repayment of any portion of the rebate will be required where the new purchaser intends to rent the property for at least some of the year in the same way. 

Selling Your Property:

You can sell your property whenever you wish and you own 100% freehold ownership as with any standard property purchase.

Just a couple of things to keep in mind:

  •  If you resell the property and the new purchaser carries on some rental activity there won’t be any VAT to repay as the new purchase will take over the arrangement so if you are selling to an investor there is nothing to repay
  •  If you sell the property to an end user who does not wish to rent out the property at all then you will have a portion of the VAT to repay- so for example after 10 years you would need to repay 50% of the initial rebate paid to you.

However, in the event that you do sell your property to an end user who does not wish to rent the property at all:

  • Repayable VAT is in relation to the initial rebate only and is not linked to your sales price and you set your sales price and of course choose your buyer.
  • You will already have enjoyed a significant rebate.
  • When purchasing your property in prime location, a vast percentage of purchasers would intend to rent out their property for at least some of the year and it is therefore just as simple to sell to an applicable purchaser and avoid any repayment ot the intial VAT rebate enjoyed

Please contact us to discuss this excellent incentive and one of our advisors will take you through this French government scheme in more detail.