Reclaiming VAT on a new property purchase
Buying property in Antares
What is real estate VAT recovery?
VAT recovery is possible if you rent out a new property offering specific services and keep it for at least 20 years. You will then benefit from a VAT credit, allowing you to make a tax-free investment.
VAT: definition and how it works
Value Added Tax (VAT) is an indirect tax paid by consumers and collected by businesses. It represents the difference between a price excluding tax (HT) and a price including all taxes (TTC). Although VAT liability mainly concerns businesses, a specific scheme allows individuals to benefit from VAT recovery: furnished rentals in the para-hotel sector.
Furnished rentals and alternative lodging establishments
To benefit from this scheme, the owner must offer additional services in accordance with Article 261D of the General Tax Code (CGI). These services include:
- Breakfast
- Regular cleaning of the premises
- Supply of household linen
- Customer reception (even if not personalized)
This tax regime is a game changer: it allows you to reclaim the VAT paid when purchasing the property.
How can I recover the VAT paid to the developer?
When purchasing a new home, the developer includes VAT in the sale price. For example:
Price including tax: €1,200,000
VAT included: €200,000
Price excluding tax: €1,000,000
If you rent out the furnished property in accordance with the conditions for parahotellerie, you can reclaim the VAT from the French tax authorities.
Keep the property for 20 years
In order for the VAT refund to be permanent, you must comply with the conditions for parahotellerie for 20 years. If you fail to comply with this time limit, you will have to repay an amount proportional to the sum already received.
Personal occupation of the property
If you wish to occupy your property yourself:
Purchase in your own name: You must declare the rent in kind (weeks of occupancy) and pay 10% VAT on this income.
Purchase through a company (family LLC, etc.): The partner must also declare their rent in kind and pay 10% VAT. If the partner does not have a current account, they must make a payment to cover their personal occupancy.
This document has been prepared for informational purposes only and does not constitute advice or a solicitation to sell or purchase real estate. The information contained herein, which may come from external providers, is for informational purposes only and does not constitute legal, financial, or tax advice. It is valid only at the time of transmission and is published without any commitment as to its completeness, accuracy, or relevance at any given time. It does not constitute legal advice. The opinions expressed herein are based on the legal and tax environment known at the time of writing and therefore cannot include any changes that may occur in the future. Before taking any action, we recommend that the recipient of this document consult with their usual legal and/or tax advisor to validate the projects they intend to implement. The recipient should also obtain from their advisors all the information they need to understand the main risks and consequences of the proposed transactions. Antares-CVR and its employees cannot be held liable for any consequences, particularly legal, financial, and tax consequences, resulting from transactions entered into on the basis of this document alone.