Reclaiming VAT on a new property purchase
Buy a property at Antares
What is VAT recovery on property?
VAT recovery is possible if you rent out a new property while offering specific services and keep it for at least 20 years. You then benefit from a VAT credit, allowing you to make a tax-free investment.
VAT: Definition and Operation
Value Added Tax (VAT) is an indirect tax paid by consumers and collected by businesses. It represents the difference between a price excluding tax (net) and a price including all taxes (gross). Although VAT mainly concerns businesses, a specific scheme allows individuals to benefit from VAT recovery: furnished rental in the parahotel sector.
Furnished rental and parahotel services
To benefit from this scheme, the owner must provide additional services in accordance with Article 261D of the French General Tax Code (CGI). These services include:
- Breakfast
- Regular cleaning of the premises
- Provision of household linen
- Guest reception (even if not personalized)
This tax regime changes everything: you can thus recover the VAT paid when purchasing the property.
How to recover the VAT paid to the developer?
When purchasing a new home, the developer includes VAT in the sale price. For example:
Gross price: €1,200,000
VAT included: €200,000
Net price: €1,000,000
If you rent out the furnished property in compliance with the parahotel conditions, you can recover the VAT from the French tax authorities.
Keep the property for 20 years
For the VAT recovery to be final, you must comply with the parahotel conditions for 20 years. If you fail to meet this deadline, you will have to repay an amount proportional to the sum already received.
Personal use of the property
If you wish to use the property personally:
Purchase in your own name: You must declare the in-kind rent (weeks of occupation) and pay 10% VAT on this income.
Purchase via a company (family SARL, etc.): The partner must also declare the in-kind rent and pay 10% VAT. If the partner does not have a current account, they will have to make a payment to cover their personal use.
This document is for informational purposes only and does not constitute advice or a solicitation to sell or buy real estate. The information contained herein, which may come from external providers, is purely indicative and has no legal, financial, or tax advisory value. It is only valid at the time of transmission and is published without any commitment as to its completeness, accuracy, or relevance at any given time. This is in no way a legal consultation. The opinions expressed herein are based on the legal and tax environment known at the time of writing and cannot therefore include future changes. Before any implementation, we recommend that the recipient of this document consult their usual legal and/or tax advisor to validate the projects they intend to implement. The recipient must also obtain from their advisors all the information necessary to understand the main risks and consequences of the planned operations. Antares-CVR and its employees cannot be held responsible for any consequences, including legal, financial, and tax consequences, resulting from operations concluded based solely on this document.