Mountain investment law

Property prices in the mountains have rocketed by 20% in just 3 years and by 22.7% in the Northern Alps, including Tignes and Val d’Isère. Mountain properties represent an excellent financial investment opportunity.

The Mountain Investment Law allows you to make a property purchase and enjoy long-term profitability. When purchasing a new or renovated residence, the Mountain Investment Law allows buyers to reclaim 20% of VAT and, consequently, to reduce the overall purchase price by 20%. The property must fulfil the following criteria:
1. Be located in a mountain area.
2. Be new or renovated.
3. Be furnished and available for seasonal rentals.
This means you cannot rent out your property for the year. You will be required to reserve a number of weeks in summer and winter for rentals. The total number of weeks for rentals is set forth by the development agreement signed between the local authorities and the real-estate development project. These provisions are then applicable on all successive buyers over a given period. An excellent compromise for anyone wishing to invest in a mountain property and who only spends around 3 or 4 weeks a year in the property.

To reclaim the VAT, you will need to offer your property as a furnished rental, by the intermediate of a managing agent or commercial lease, with the offer of at least three of the following four hotel services:
• Reception: you should have the necessary resources to be able to offer a reception service;
• Breakfast;
• Housekeeping, undertaken at a regular frequency;
• Linen: you should be able to provide all necessary household linen for your tenants during their stay.
Purchasing a residential tourism property managed by a commercial operator is, therefore, the most typical option to be able to claim this beneficial tax rebate.

The VAT amount is then repaid in full within 4 to 6 weeks after handover of the keys, and is not to be confused with tax credit.

In the framework of a Mountain Investment Law, you need to own the property for a total of 20 years; however, there is an early-release clause. If you should sell the property, the vendor will have to repay the VAT on a pro rata basis of the number of years remaining and should sell the property to an investor who wishes to continue with this obligation.

For more information regarding the Mountain Investment Law, feel free to contact us, our team will be delighted to outline the most beneficial solutions for your project.