The price of a new apartment sold by a professional in France includes VAT at 20% in most cases. An owner can only recover it if their own letting activity is subject to VAT, which requires short stays accompanied by at least three of four para-hotel services: breakfast, regular cleaning of the premises, supply of household linen, and reception of guests. The door exists, but it binds: VAT recovered on a building is only definitively acquired at the end of a twenty year regularisation period. For a non resident owner, every step below also needs to fit your home country tax position, which this article does not cover.
Where the recoverable VAT comes from
A new build, completed no more than five years earlier, is subject to French VAT when sold by a professional. The rate is 20% in most cases.
On a new apartment in a resort, VAT therefore represents a significant share of the price paid. That is the sum the para-hotel regime allows you, under strict conditions, to recover.
The principle: furnished letting is exempt
By principle, furnished letting is exempt from VAT in France, with no possibility of opting in. An owner who lets their apartment by the week, even all season long, does not charge VAT to guests.
The counterpart is mechanical: whoever collects no VAT deducts none. An exempt landlord cannot recover the VAT included in the price of a new apartment, nor the VAT on works or equipment invoices.
The exception: para-hotel services
Letting becomes subject to VAT when it comes close to hotel keeping. The French tax doctrine, updated on 26 March 2025, sets two cumulative conditions.
First, duration: the stays offered must not exceed thirty nights.
Second, services: in addition to accommodation, the landlord must offer at least three of the four following services.
Breakfast, offered in line with the practices of the hotel trade.
Regular cleaning of the premises: performed before the start of the stay, then offered on a regular basis during the stay. A weekly rhythm is considered sufficient by the doctrine.
Supply of household linen: sheets and towels provided at the start of the stay, with renewal offered regularly.
Reception of guests: welcoming and informing travellers, which does not need to be personalised or permanent.
Three of these four services, genuinely offered, bring the letting into the scope of VAT. Two are not enough.
The rate applicable to nights
Once within the scope of VAT, accommodation services fall under the reduced rate of 10%. The landlord therefore charges 10% VAT on nights, and in return recovers input VAT: on the new apartment as well as on the running costs of the activity.
Recovering means actually collecting
One point is often discovered too late: the right to deduct is reserved for taxable persons who actually pay VAT.
A landlord under the French small business exemption, the franchise en base, does not charge VAT to clients and, for that precise reason, cannot recover VAT on purchases. The thresholds of this exemption have changed recently: the level applicable to your situation is a point to validate with your accountant before any commitment.
Nothing is acquired before twenty years
VAT recovered on a building remains under watch during a regularisation period of twenty years, counted in twentieths.
If the property stops being used for an activity carrying the right to deduct before the end of that period, a fraction of the VAT initially deducted must be repaid, proportional to the remaining years. Stopping the para-hotel services, moving to exempt letting or changing the use of the property are all events that trigger this repayment.
Concretely: an owner who recovers VAT at the start and abandons the regime after a few years hands back part of what was recovered. The para-hotel regime is not a one off advantage, it is an operating commitment over time.
The operating structure matters as much as the services
The regime also depends on who operates the property and who provides the services. A lease granted to an operator, as in a tourism residence, management on your behalf under a mandate, or direct operation do not produce the same tax analysis.
This is a structuring decision to settle with your accountant before signing, not after: the choice of structure determines who owes the VAT, the reality of the services provided and the solidity of the arrangement over time. Non resident owners should also check who handles the French VAT registrations and returns that come with the regime.
Frequently asked questions
Can I recover VAT with a classic furnished letting, without services? No. Furnished letting is exempt from VAT with no option to opt in. Without at least three of the four para-hotel services, there is no VAT collected and no VAT recoverable.
What VAT rate applies to nights under the para-hotel regime? The reduced rate of 10% applies to accommodation services of the hotel sector and of sectors with a similar function.
What happens if I stop letting after a few years? A fraction of the VAT initially recovered on the building must be repaid, calculated in twentieths over the remaining years of the twenty year regularisation period.
Does the French small business VAT exemption concern me? If your turnover stays under the thresholds of the franchise en base, you charge no VAT and can recover none. Waiving the exemption is possible: it is a numbers decision to make with your adviser.
Sources
- BOI-TVA-CHAMP-10-10-50-20, French tax doctrine of 26 March 2025, bofip.impots.gouv.fr, consulted on 5 October 2026.
- Leaflet « Loueurs en meublé », impots.gouv.fr, March 2026 edition, consulted on 5 October 2026.
- FAQ « Régime des locations meublées », impots.gouv.fr, March 2026, consulted on 5 October 2026.
- BOI-TVA-LIQ-30-20-10-10, French tax doctrine of 7 August 2024, bofip.impots.gouv.fr, consulted on 5 October 2026.
- BOI-TVA-DED-60-20-10, French tax doctrine of 3 January 2018, bofip.impots.gouv.fr, consulted on 5 October 2026.
- « Achat dans le neuf », impots.gouv.fr, consulted on 5 October 2026, and fact sheet F2407 on property VAT, service-public.gouv.fr, sheet verified on 10 April 2026, consulted on 5 October 2026.
This article is general information, current as of 5 October 2026. It is not personal tax advice: setting up a para-hotel regime is a decision to take with your accountant, in France and in your country of residence, in light of your situation.