Buying a ski property in the French Alps is a fantastic lifestyle investment, a home you can enjoy all year-round.

The French Alps are home to some of the biggest and most popular ski resorts in the world such as the Three Valleys which is the largest interconnected ski area, with over 600km of pistes distributed between seven resorts, where you will find the most popular resorts, Val Thorens, Meribel and Courcheval.

The French Alps also offer a wonderful lifestyle off the slopes. With plentiful activities such as hiking, golfing, biking, as well as great food and wine, there are many reasons to buy a chalet in France.

French properties may be freehold or leaseback. Freehold properties offer the most flexibility whereas leaseback properties are professionally managed rental investments.

Freehold – Most properties in the French Alps are freehold. This is a normal second home and has no rental obligation. You can use your property privately or you can rent it out if you choose.

Leaseback – Some large development projects, boasting complete management services will rent your apartment out for you when you are not using it. You do own the freehold of the property, but upon purchase, you would lease the property back to a management company for a minimum of nine years. During this period, your management company will maintain your property and run the rental business.

Buying a leaseback ski property as a rental investment in France also offers a tax incentive.  You do not have to pay the 20% TVA (French VAT) which you usually must pay for a new freehold property.

Also, some leaseback properties offer a guaranteed rental income, and others offer a share of the actual rental income for the weeks your apartment is in the rental pool.

There are no restrictions on foreign buyers, any type of property can be purchased by a foreigner.

When you own a freehold property, there is no obligation to rent your property. You can use your property privately as much as you like, or you can choose to rent it out.

When you own a leaseback property, you are required to rent your property for a minimum period of 9 years, but you may block out periods for your own use.

1. Research

Research the market and seek advice on the perfect ski resort to suit your requirements. Discuss your wishes with one of Lindforth’s mountain property finding experts. We know all the ski resorts extremely well and are here to help.

2. Site visit or property inspection.

Arrange to visit France to view the properties that you are interested in. We will set up all your appointments with estate agents, developers, banks, tax advisors, etc., and send you a personalised itinerary with a link to Google Maps so you can see your journey.

3. The pre-contract (compromis de vente).

Once you have decided you want to buy, the expert real estate agent in France or the Notary (Notaire) will draw up the pre-contract (compromis de vente). This pre-contract is legally binding and once signed, you are then bound by this contract to purchase the property. At this stage, you will also be asked to pay a down payment (dépôt de garantie), traditionally 10%, but these days often 5%, of the purchase price. All deposits are held safely by the appointed notary.

4. Cooling off period.

Whilst the pre-contract binds the buyer and the seller, this is subject to fulfilment of the agreed sale conditions and subject to a 10-day cooling off period that protects any private purchaser in France. The agreement may be cancelled if, for example, the buyer’s bank refuses to grant the loan, or the local authorities exercises a right of first refusal. Under these circumstances the buyer’s deposit is refunded. However, once all the conditions have been met, the pre-contract is binding.

5. The Sale.

Every French Deed of Conveyance must be physically signed in France and witnessed by the notary (Notaire). The Notaire is a neutral legal advisor who ensures that the contract between the two parties is correctly recorded in a valid legal document. Due to this neutral role, it is not unusual in a French property transaction to have one Notaire acting on behalf of both the buyer and the seller.

All monies concerning the sale (price and fees) will pass through the Notaire’s secured account. The deposit mentioned above will also be kept in the Notaire’s account.

If you are unlikely to be in France at the time of signature, then you may sign a Power of Attorney empowering one of the Notaire’s clerks to sign the deed on your behalf; the power of attorney being valid for that specific transaction only.

Upon completion, the balance of the purchase price, taxes, registration costs, miscellaneous costs, disbursements and Notaire’s fees incurred for the conveyance must be credited to the Notaire’s account. The Notaire will then immediately credit the purchase price to the seller’s account.

The costs associated with buying a property in France will vary depending on your purchase. The costs consist mainly of taxes paid to the authorities and the Notaire is responsible for collecting these taxes on behalf of the state. 

If you buy a new-build property, the purchase costs are much lower. Your total purchase costs including notary fees, land registration fees and taxes will be approximately 2.5% of the property price. This applies to all new properties under 5 years old.

If you buy a resale property, the total purchase costs will be in the range of 6% to 8%.

If you decide to buy with a mortgage, the notary will charge an additional 1%.

Notaries fees vary so the price of the property, among other factors, will determine the exact amount you will be charged.

A benefit of buying a new-build rental property in the French Alps is that you can apply for a VAT rebate. This allows you to save 20% of the property purchase price. The expert estate agent and tax advisor in France will guide you through the process.

To meet the eligibility criteria: the property must be furnished and let on a short-term basis, and you must offer at least three “hotel-style” services. For example, the provision of linen, breakfast delivery, and regular cleaning. Many local rental operators based in the ski resorts provide these services and practically is straightforward.

To qualify for the VAT rebate, you will need to rent the property out for 20 years. If you cancel the lease agreement early, or decide to sell your property in France, you may need to pay back a portion of the VAT you were refunded.

Please contact us if you would like to learn more about buying a property in France and reclaiming the VAT.

Many French property buyers decide to take a mortgage because you can offset the interest payments against your rental income.

French banks will lend up to 85% of the purchase price for a freehold property. The banks will lend up to 80% for a leaseback property bought by an EU citizen, whereas they will lend up to 70% for non-EU citizens buying a leaseback property. The repayment period will usually be 15 or 20 years and French banks offer both fixed and variable rates.

The amount you can borrow depends on your monthly income. The mortgage repayments must not amount to more than 30% of your monthly (joint) income. This 30% will also include any existing mortgage you may have in your home country.

We would be happy to recommend a mortgage broker specialising in French property finance to help you.

You can buy a ski property in France in the name of a company. For example, buying in a company name may be beneficial, if you want to buy the property with more than 2 people.

You should seek expert advice as there are several French company structures to consider. We are happy to introduce you to a lawyer or a tax advisor in this regard. Please contact us if you would like to learn more about buying a property in France in a company name.

Across The Alps, rental yields vary between 3% – 5%. Your rental income depends on a variety of factors such as the property’s location, the resort, facilities on offer, quality & cost of rental services.

Buying a ski chalet can be a great investment, offering regular rental income, property value appreciation over time, and of course, a wonderful lifestyle for your family!

There are no restrictions for selling your property in France. You can sell whenever you like.

The tax you pay when you sell your property in France will depend on a variety of factors, including your country of residence.

If you are a non-EU resident, then you will be charged both capital gains tax (Impôt sur le Revenu) and social tax (Prelevements Sociaux).

If you are an EU resident (including EEA and Switzerland) then you will only need to pay the capital gains tax (Impôt sur le Revenu).

Capital gains tax (Impôt sur le Revenu) is charged on the taxable profit at a standard rate of 19% if you sell within 5 years. However, the rate reduces to 0% after 22 years of ownership. After 5 years, the rate reduces incrementally every year over the 22-year period.

Social tax (Prelevements Sociaux) is charged on the taxable profit at the standard rate of 17.2% if you sell within 5 years. Again, the rate reduces to 0% but over a longer period of 30 years of ownership. The rate reduced incrementally each year over the 30-year period.

When calculating taxable profit, you can deduct the costs of buying and selling property and any major improvement expenses. Please note, a tax advisor will advise you and prepare the calculations for you.

In France, the beneficiary will pay the inheritance tax. The tax rates and allowances vary according to the beneficiary’s relationship to the deceased.

There is no inheritance tax payable between spouses or couples with a “Pacte Civile de Solidarité”.

Each child has a tax free allowance of €100,000 from a parent and there are tax bands at both 20% and 30%. When the value of assets passes the €100,000 threshold the rate of Inheritance Tax is banded depending on the value of additional assets in France. For children, French inheritance tax is considerably lower than in the UK. Please note, a tax advisor will advise you.

There are two local annual taxes, the ‘taxe d’habitation’ and the ‘taxe foncière’. The rates of tax are set by the local authorities and vary from one region to another. Both taxes are typically around 10 – 20 euros per m2 per year each.

If you are leasing your property to a professional management company, they will usually pay the taxe d’habitation so you only pay only the taxe foncière. When you buy a new property, you do not pay the taxe foncière for the first two years.

The French wealth tax is only liable on physical assets located in France. The tax is payable when the taxable household net real estate wealth exceeds €1.3 million, when it is then applied on net assets above €800,000. Wealth tax rates are progressive, starting at 0.5% to a maximum of 1.5% of your equity of your property. Each owner of the property has a wealth tax allowance, therefore increasing the threshold. Please note, a tax advisor will advise you.

If you decide to take advantage of the VAT rebate and rent your property to holiday-makers, you will be required to pay income tax on your rental income. Non-residents pay French tax on the taxable income at a flat rate of 20%. To calculate your taxable income, your accountant will offset these allowances:

• Purchase costs
• Land taxes
• Interest on your mortgage
• Accountant’s fees
• Property & furniture depreciation

Therefore, it is unusual to pay a lot of income tax on your rental profits in France. We always recommend speaking to a local tax advisor who will be able to help you with your taxes.