Under what conditions can I reclaim the VAT (20%)

 Under what conditions can I reclaim the VAT (20%) paid
on my property?
There are three significant points to comply with in order to obtain a VAT reimbursement under the
Classic French Holiday Home Rental Scheme:
1. The property needs to NOT be your permanent residency.
2. The property needs to be available for short-term holiday letting.
3. The property needs to be able to provide at minimum, three out of four ‘French hotelier
services’.
1. NOT a Permanent Residency:
As long as you have a permanent residency that is different to the French property you are buying
as a second home, you will comply with point one.
2. The property IS AVAILABLE for short-term letting:
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The property needs to be readily available for short-term holiday lets. The management
companies we work with will be in a position to provide a rental service.
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The property needs to be considered acceptably available for holiday lets, apart from the
time that you wish to spend at the property yourself.
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The owner has the right to stay in their home. However you may be liable to repay the
reimbursed VAT, on a pro-rated basis, based on the time spent in the house, due to those
days not being offered for short-term lets.
IMPORTANT NOTE:
1. By way of example: if after three years of operation you can only prove you have
rented the property for a total of three weeks, the tax man could be in a position to
question your eligibility to comply for the VAT reimbursement. The accountancy firm
will also file accounts on a yearly basis in order to declare income from the property.
2. The search for tenants can be done by the owner directly or through an agency.
3. The start of the agency letting agreement needs to commence from the day of
delivery.
3. PROVIDING French Hotelier Services:
The 4 hotelier services stated are:
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Breakfast
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Available cleaning of the premises
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Provision of household linen
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Reception/key handover of guests
This is the legal text that is relevant and that needs to appear in the management agreement:
Compte tenu de l’activité d’hébergement para-hôtelier exercée par le Propriétaire, il incombera au
Mandataire de proposer et fournir aux locataires, pour le compte du Propriétaire, trois des quatre
services para-hôteliers prévus à l’article 261 D 4° b) du Code General des Impôts, savoir :
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L’accueil
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La fourniture du linge de maison ¡V linge de chambre et ligne de toilette)
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Le nettoyage régulier des locaux
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Le service du petit-déjeuner
Ces prestations devront être fournies dans des conditions similaires à celles des établissements
hôteliers exploites de manière professionnelle, et selon les modalités prévues par l¡¦instruction
administrative du 30 avril 2003 (3 A-2-03), de sorte que le principe de l’assujettissement à la TVA
de la location ne puisse être remis en cause.
This legal text will allow you to comply with point three and can be verified under; article 261 D 4°
b of the “Code General des Impôts” –
IMPORTANT NOTE:
1. The start of the management contract needs to commence from the day of delivery.
2. The key conveyance can be done via an individual, an agency or letter box/equivalent.
How do I claim the VAT back?
The VAT reclaim needs be done via an accredited legal and financial advisor who can organize
the process for you and can manage your accounts over the years for the VAT deduction. These
are the advisors who we recommend for organizing the VAT reimbursement:
AUDREX INVESTISSEMENTS
B.P. 60
28 Rue du Faubourg St Alban
73602 MOUTIERS CEDEX
Tel : 04 79 22 37 50
Fax : 04 79 22 37 50
Mail : [email protected]
The VAT reimbursement requests may be done as and when stage payments are made to the
developer, or at delivery of the property. The requests are made to the ‘Tresor Public’ on a
quarterly basis by the accounting firm.
Costings:
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€120 HT one-off fee for the VAT reimbursement and registration.
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€310.96 TTC annual fee for the accounting and publishing of VAT and BIC.
The owner shall be eligible to pay VAT on the rental income (the current rate is 7%).
IMOPRTANT: The management contract must be signed prior to the VAT reimbursement
requests.