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The rental management mandate with Avecoeur and the VAT rebate

News & Guides / The rental management mandate with Avecoeur and the VAT rebate

If you decide to rent your property out for holiday lets through Avecoeur by signing a rental management mandate then you can also benefit from a full VAT rebate which is a huge saving.

Below is a list of the requirements in order to get your VAT reimbursed on the purchase price:

  • Purchase a new/off-plan property in France
  • Sign a rental management mandate with a French registered professional management company providing at least 3 of the 4 following services:
    • Provision of bed linen, sheets and towels
    • Cleaning of the villa
    • Greeting guests with the keys at the property or the reception
    • Providing breakfast
  • Rent your property out for at least a few weeks each year in order to generate a reasonable income each year
  • You don’t stay in your villa for more than 6 months each year as if it is more it will be deemed your primary residence

The cost to the owner:

  • Pay 35% of the rental income to Avecoeur and receive 65%. This 35% includes the Tour Operator/booking platform commission which can often reach 20% (booking.com is 17% and Expedia 18% for example).
  • Pay a French Chartered accountant (which we can arrange) 400 Euros per year to initially recover the VAT and prepare your yearly accounts.

Benefits:

  • In addition to providing the services required for clients to have their VAT reimbursed Avecoeur also provide concierge services at the disposal of both the guests and the owners for no extra cost.
  • When the owner stays at the property he/she can request the cleaning services and linen/towel provision for themselves too.
  • Maintenance and repair issues are dealt with by Avecoeur rather than by the owner (at the owner’s expense)
  • As an owner you can earn a good rental income and you choose when you want to use it and when you want to rent it out so you stay in full control of your freehold property
  • Avecoeur does a full analysis of the rental market before proposing the rental tariffs for the year ahead so no need for you to guess what your rental figure should be
  • Avoid the hassle of creating partnerships with Tour Operators or booking platforms and then taking professional photos and managing your various adverts and dealing with enquiries and taking payment etc. All this time consuming work is taken care of for you.
  • No need to find local cleaners and linen providers yourself for guests and all the issues that can arise if they fail to do the job properly or fail to show up.

Cancelling the rental mandate:

  • The mandate can be cancelled each year however if you do cancel it after say 5 years then you will have to pay back 15/20ths of the VAT since the VAT is rebate is meant to be for renting over a 20 year period.
  • You can sell your property with the rental mandate intact- you do not need to cancel it to sell since most people (unless they want to live in the property) are happy to rent it out for at least a few weeks each year.

NOT a leaseback property:

  • When you sign a 9 or 11 year rolling commercial lease with the likes of Pierre et Vacances, Terressens or Odalys for example you are committed to the lease for 20 years with heavy penalties (up to two years worth of rent) if you refuse to renew the lease after the first 9 or 11 years. When you sign a rental mandate with Avecoeur on the other hand you can cancel the arrangement each year if you either want to stop renting or prefer to use another management company and there are no penalties for doing so.
  • For the companies that do provide concierge services some charge a substantial fee for doing so which is not the case with Avecoeur
  • When it comes to selling your property or obtaining finance when buying a leaseback property with a commercial lease attached it limits the number of banks that are willing to lend. Signing a rental management mandate instead avoids this issue.
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