The para-hotel business is an intermediary contract between furnished rentals and the hotel business. It is the ideal solution for buyers to open a seasonal rental company while paying less tax. You must provide, in addition to accommodation, at least 3 of the following 4 services, under conditions similar to those of hotel establishments, is considered to fall under the supplementary hotel regime and not under the rental regime.
- Breakfast
- Regular cleaning of the premises
- Supply of household linen
- Customer reception
Unlike the simply furnished rental (LMNP device), it will be necessary to provide the tenant with services. Seasonal rental is no longer an ancillary activity, but a professional and commercial activity: renting goods and services. Rent a furnished property, add 3 hotel services, and start tax-exempt from the first year!
Buying a new property and getting TVA back with a para-hotelier service
It is a commercial activity by nature and therefore subject to VAT. The owner will have to charge VAT (which he will have to declare and pay to the Tax Administration) but may also deduct it from purchases and costs incurred for his activity.
VAT declaration = invoiced VAT – deductible VAT
Rate to be applied to invoicing:
– Accommodation: 10%
– Para-hotel services: 20%
– Furniture & decoration pack: 20%
Example with an investment in the “Domaine de la Calade”
Mr and Mrs X buy on January 1, 2023 a new house worth €439,000 including tax under the para-hotel regime. Their property is intended to be rented out.
On its acquisition, mr and Mrs X will be able to recover €73,166 in VAT. (VAT credit refundable by the Tax Administration after verification)
20-year regularization period
Need to pay back part of this VAT in the event of resale less than 20 years after acquisition.
VAT to be paid back = VAT deducted on acquisition – 1/20th per year or fraction of a year of ownership
Example
Mr and Mrs X wish to resell their property on January 1, 2033, i.e. 9 years after its acquisition. They must therefore pay back part of the VAT previously deducted: €73,166 – €36,583 = €32,924
Mr and Mrs X must pay €32,924 in VAT. Their net gain in relation to VAT amounts to €32,924
It is possible to benefit from a total exemption from capital gains tax, subject to compliance with certain conditions, and provided that the gross rental income received in the two years preceding the sale is less than €250,000 / year.
Resumption of commitment
VAT = the seller is no longer required to pay back part of the VAT deducted.
What is the profitability of new construction?
The “Domaine de la Calade” enjoys an exceptional location, located in the heart of La Garde-Freinet, an authentic Provençal village surrounded by lush nature and bordered by the Gulf of Saint-Tropez. Imagined as an art of living in the middle of nature, the estate combines the luxury of everything on foot with quality shops and amenities in the immediate vicinity.
With a projected return of 4%, the program attracts well-informed investors. Located 20km from Saint Tropez, the program meets all the criteria for a successful para-hotel investment: MJ Développement has indeed bet on a unique environment, where rental demand is strong and faithful in season, as well as on status.
The houses can be sold fully furnished and decorated down to the smallest detail to offer buyers a secure, profitable, and viable turnkey investment in the long term. A rare real estate opportunity in the area, it consists of 11 semi-detached villas with 3 to 5 rooms with large terraces and superb private gardens. A skillful marriage of traditional architecture and modern know-how, everything here introduces you to the tranquility of the Mediterranean…a true art of living!
This of course applies to all new constructions on the French Riviera.
We offer a “turnkey” purchase
- A property with an attractive forecast profitability
- A furniture pack with our local partner
- “Concierge” management with our partner
- Accounting expertise thanks to our partner
Do you want to furnish your rental investment in La Garde-Freinet? With our furniture packs and experience in interior design, styling, and decoration, you have the assurance of a quality furnishing solution to maximize the potential of your real estate investment. Your rental property will be equipped with everything necessary (furniture, decoration, accessories) to welcome your tenants in the best conditions.
We can offer turnkey furniture packs for real estate investors looking for a quick and easy solution. In addition, their services include delivery, assembly, waste extraction, cleaning, photo reporting, and after-sales service.
We understand the importance of optimizing the return on investment for real estate investors, and that is why we have designed a furniture pack specially adapted to any new construction program.
CONCIERGE SERVICE
For the para-hotel service, it is possible to delegate your property to the KEY SUN SERVICES concierge, especially if you do not live nearby. KSS is a Concierge service located on the Côte d’Azur and with 15 years of experience, meets the needs of owners wishing to rent their accommodation in a simplified way during their absence.
What distinguishes KSS from others is their ability to make themselves unforgettable, and to mark the spirits by addressing the senses and emotions. In the world of Private Concierge, it is much more a question of “code of honor” than of contract. It is necessary to deliver a service of excellence, totally personalized where satisfaction can only be total and customer expectations exceeded.
A major challenge when you know the level of requirement and quality required to claim to assume the role of Concierge in the very select and prestigious universe of the Private Concierge. At the heart of the ambition of a Concierge, there is the challenge and the desire to serve with excellence.
In addition to their basic services such as Check-in, Check-out, and cleaning,…they offer different types of daily services, such as a chef at home, a babysitter, car rental, boat rental and even organize small events. (Baby shower, birthday,…)
Key Sun Services’ primary objective is to simplify your life by allowing you to save precious time. They want to offer services such as welcome baskets for your arrival, linen rental, home shopping delivery, and even flower or champagne delivery for your craziest desires! Available 7 days a week for all your needs, and of course in the event of a problem or emergency; they will do their utmost to ensure that your customers have a dream vacation!
ACCOUNTING SERVICES
Are you a furnished property owner and would you like to be guided by a specialist in rental taxation?
We will introduce you to our partner agency Cabinet Roche in Lyon.
ASSIGNMENTS
Professional and Non-Professional Furnished Rental Companies
Property income Tax exemption
EXPERTISE
Choice of the most appropriate taxation
Follow-up on your tax strategy
VAT recovery
Preparation of your accounting declarations
ASSETS
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