Legal, tax and financial
As in any country, you have to deal with legal, tax and financial matters.
On this page you can see the main points.
Our partners are ready to relieve 100% of your worries and arrange everything for you.
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French law
French law is largely the same as UK law. After agreement on the purchase, the notary draws up a purchase contract, the formalities are checked, the purchase price is transferred and the house is transferred, after which registration in the land registry follows.
Plot + house/chalet
In order to reduce the cost price and to be able to invoice significantly annually, it is becoming more and more common to only sell the house or chalet to the owner, and to issue the land to the owner on a long lease. This entails risks. With us, you become the owner of both the plot and the home in all cases.
Rental contract
The agreements about the rental of your holiday home are laid down in an official French rental agreement, the Bail Commercial. This contains the rights and obligations of the owner and the rental organization.
Power of attorney
You can sign the purchase contract yourself at the French notary, possibly with an interpreter. Most owners choose to sign a power of attorney at a notary in the UK, after which everything else is taken care of by the UK and French notary.
Owners' Association
Most parks have an Owners' Association (ASL). By purchasing a holiday home at a holiday park in France, you automatically become a member of this ASL. The ASL represents the interests of the owners.
VAT/TVA refund
It is very financially attractive to rent out your holiday home in France. FranceComfort takes care of this for you without you having to worry about it. A big advantage is that in the case of a new accommodation, you will get a refund of the VAT paid (TVA in France). The VAT rate in this case is 20%. Every year 1% expires. The moment you sell your house again after 10 years, you must repay half of the TVA received. If you sell after 20 years, you do not pay anything back. On balance, you will therefore receive a 1% return per year.
Wealth tax
In France, you pay wealth tax on the value of your second home property that you have in France. However, there is an exemption of up to approximately 1.3 million euros. If your property in France has a value higher than 1.3 million euros, you pay wealth tax, if the value is less than 1.3 million euros, you do not pay wealth tax in France.
Income tax
Income from real estate in France is taxable in France, even if the owner lives elsewhere. Non-residents must declare their French income. This can be fully done for you. By means of depreciation, the tax can be minimized and often even comes out to zero.
Owner and user taxes
In France you pay local taxes. In France, this is the "taxe foncière" (property tax): this tax concerns the possession of the immovable property and the "taxe d'habitation" (residential or user tax): this tax taxes the people who have the enjoyment of the property. The taxable base consists of the cadastral rental value.
Registration
Since the entry into force of the 'Loi Le Meur' on 21 November 2024, the rules surrounding the rental of furnished tourist accommodation have been tightened. Owners who want to rent out their property temporarily must apply for a registration number from the municipality where the property is located. This is taken care of for you.
Classification
Having your property classified as a 'meublé de tourisme' has an advantage for the tax deduction. Classified accommodations are eligible for a flat-rate expense deduction of 71% on gross rental income, which means that only 29% of income is taxed. For non-classified accommodations, this deduction is limited to 50%.
Rental return
You can have your holiday home rented out by FranceComfort. You will receive an advance halfway through the year, and the final bill at the end of the year. This final settlement is structured as follows: The VAT (TVA), fee for FranceComfort, park costs and any other costs are deducted from the turnover. The remaining rental amount will be increased by VAT (TVA) and transferred to the owner.
Fixed or variable return
The return is variable, which is also more attractive to an owner. With a fixed return, the operator will always apply a risk premium. In addition, rental income may increase faster than any indexation, so that the owner benefits less from the rising rental income.
Costs of water and electricity
In most cases, the meter for water and electricity is in the name of the owner. In addition to the rent, FranceComfort also charges guests park fees for the consumption of water and electricity. This amount goes to the owner without deduction and roughly covers the costs of water and electricity.
Financing
You can choose to finance all or part of the purchase price of your holiday home in France. This can be done, for example, from the surplus value of your home. Financing in France based on your holiday home is virtually impossible.
Increase in value
Part of your total return is the expected increase in value. In France, holiday homes are relatively low-priced. It is therefore justified to expect your holiday home to increase in value. Because this can never be said with certainty, it is not included in return calculations. For your purchase decision, it is of course important that the holiday homes have upward potential.
Park costs
The park costs are transparently structured. The costs are totalled without mark-up and divided over the number of owners. The costs and underlying invoices are checked in advance by a representative of the owners.
Total return
Your total return consists of rental income, 1% VAT release, own residence and increase in value.
Would you like more information? Do you have any questions? Would you like a non-binding calculation? A viewing?
