Posted on 03 March 2014
Celebrity sightings in the French Alps in February, including Paul McCartney and Leonardo DiCaprio, are a sign that the passion for skiing aroused by the Sochi Olympics has reached all levels of society, said estate agency Skiingproperty.com, adding that interest in purchasing a ski home is expected to rise this year too. Not having the budget of a famous film or rock star means that most buyers of a home in the Alps will rent out their property to help cover its costs, whether they own a leaseback or classic freehold property.
Said Director at Skiingproperty.com Julian Walker: “We estimate that around eight out of ten people rent out their property in the Alps. For private lets, some resorts and types of properties will have better occupancy rates than others, so it’s vital to do your research and your target occupancy level – perhaps leaseback is the best option for you, perhaps not. Start by taking note of our four tips.”
1) For maximum rental potential, buy in a dual season resort that has a short transfer, long winter season, good snow record and resort facilities, including ski school, and is linked to one of the larger skiing areas, such as the Three Valleys, Espace Killy or Portes du Soleil. Ski in ski out always lets best. Examples of resorts that tick these boxes include Tignes (Espace Killy), Courchevel (Three Valleys) and Les Gets (Portes du Soleil).
2) Leaseback is a hands-off way to own a ski property and derive fixed annual income from it. Leaseback developments, or résidences, and the on-site facilities that come with them are fully managed by tourism management companies – this means rental return for is rarely above 2 per cent and owners aren’t able to personalise their property as much as with a classic freehold. Buying a classic freehold ski home and letting it yourself would typically suit owners who need to maximise rental income. Using a local property management agency to manage bookings and changeovers is a popular option, although a commission typically of 20 per cent of earned rental income would need to be factored into the costs. It is advisable speaking to a local agency as part of your research. At least ten weeks occupancy should be achievable in the winter season, with eight in the summer, or ten in a year-round resort such as Chamonix.
3) When estimating your net income from rentals, remember that you will be liable for income tax in France on your net rental income, after deduction of the allowances applied under the relevant tax regime. You should also declare your French rental to the HMRC in the UK. However, the UK/France double taxation treaty gives relief for tax paid in France against liability to tax in the UK, so if your UK tax liability is greater than the tax payable in France, the difference is payable in the UK.
4) Many buyers will take advantage of the historically low interest rates available with French euro mortgages. This means it would make sense to receive rental income in euros, the same currency you would need to service your repayments, thereby not leaving you exposed to currency exchange rates.
5) Insurance and upkeep costs need to be factored in. Ensure your policy covers you for holiday lets and any associated liability. Meanwhile, if your property is part of a development with communal areas, you’ll have annual communal fees to pay, as well as France’s two types of council tax (Foncière and d’Habitation).
Skiingproperty.com has a selection of new-build property for sale, including leaseback and classic freehold, in established resorts throughout the Savoie and Haute Savoie regions of the French Alps.