VAT recovery

How can I save 20% on the purchase price?

Save 20% on the purchase price by simply requesting a VAT refund from the French tax authorities.

To request a refund from the French tax authorities, you must have paid the purchase price in full. A French accountant can help you fill out the refund request form and provide you with the information you need about tax administration in France.

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Why does the French tax administration refund VAT to you?

The VAT refund is provided that you rent your property via a management company.

That said, there are 3 specific conditions that must be met:

1. The property must be furnished
2. The rental offer must be short-term: for example, you cannot rent your apartment to the same tenant for an entire winter season or for an entire year
3. At least three of the para-hotel services The following should be offered to customers
   - Reception, for example handing over the keys
   - Provide sheets and household linen
   - Household
   - Breakfast (which can be delivered)

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The management company and the contract

The rental of your property is managed by a management company that will provide tenants with the various para-hotel services, as well as additional rental services and who will maintain your property on your behalf.

You sign a commercial lease with the rental company, in which your options for personal use of the property are listed, as well as the management, maintenance and rental costs that you will receive from the rental company.

Make sure that the rental agreement is flexible so that you will be able to use your property whenever you want, as long as you give sufficient notice to the company so that they can organize rental planning for the winter season.

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The rental period of 20 years

The French tax authorities offer a refund of VAT provided that the property is rented for 20 years.

However, you can stop renting your property after 10 years, knowing that you will have to return 10/20th of the amount of VAT you were reimbursed for.

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Selling your property

Since you are the full owner of your property, you are free to resell it, even during the period as early as 20 years.

When it comes to the VAT refund and the rental contract, you have two options:

1. The buyer wants to follow the same rental plan and will take over the rental contract. No VAT amount has to be returned since the refund continues with the new owner.
2. The resale takes place after more than 10 years of rental and the buyer does not want to continue renting the property: you must return ½ of the VAT refund you received. However, between the VAT you have saved and the estimated capital gain, buying and reselling a property will always be interesting.