Investing in Megève

Investing in Megève: optimize your real estate investment with the best legal and tax structure

Megève, the famous ski resort in the French Alps, is much more than a vacation destination. It attracts investors from around the world, drawn to the charm of its authentic village and its high-end property market. If you’re thinking of buying a property in Megève, whether as a second home or for seasonal rental, it’s crucial to structure your investment properly from both legal and tax perspectives.

Choosing the right legal structure for your real estate investment

When you invest in Megève, several legal structures are available, each with its own specific tax and wealth implications. Here’s an overview of the main options:

Investment in your own name

This is often the simplest solution for individuals wishing to acquire a second home for personal use. Additionally, this option is universally understood internationally, reducing the risk of double taxation.

If you plan to rent out your property (seasonal rental), the income will be taxed as a commercial revenue “Bénéfices Industriels et Commerciaux” (BIC). However, if multiple investors are involved in the acquisition, managing the real estate asset can become complicated, as decisions must be taken unanimously, potentially leading to deadlock.

Family LLC (SARL de famille)

The SARL de famille is particularly interesting if you plan to develop a furnished rental business in Megève. It allows you to benefit from the BIC tax regime while providing legal protection for the partners. This type of structure is also well-suited to family management of the investment, offering advantages for inheritance planning.

The SARL de famille is a tax-transparent commercial company when it is formed by partners united by direct family ties.

Non-trading property company (SCI)

The SCI allows several people to organize the acquisition and management of a property, and facilitates the transfer of family assets. However, it is a civil company and not suitable for furnished rental (recognized as a commercial activity in France).

Taxation of rental income

If you decide to rent out your property in Megève, it’s important to understand the tax rules that apply to rental income.

Furnished rentals

Furnished rentals in Megève offer significant advantages for investors, especially under the “régime réel” tax system. Under this regime, you can deduct many costs and expenses associated with running the property, such as loan interest, maintenance and repairs, insurance, and management fees.

One of the main benefits of the “régime réel” is the ability to depreciate the property (excluding the land) and the furniture, which significantly reduces the taxable base. Combined with other deductible expenses, depreciation can often lead to reduced or even zero taxation of rental income for several years.

This system is particularly suited to prestige properties in high-end resorts like Megève, where investments are substantial and tax optimization is crucial for maximizing profitability.

The para-hotel business

If you offer additional services to your tenants, such as breakfast, regular cleaning, provision of household linen, or guest reception, your activity may be classified as para-hotel. This regime, more closely regulated than simple furnished rentals, allows you to benefit from the BIC regime with more favorable terms for VAT recovery. Under certain conditions, you can reclaim VAT on the property purchase and expenses related to your business. However, para-hospitality also comes with additional administrative obligations, such as strict management of the services provided.

Property wealth tax (IFI)

The Impôt sur la Fortune Immobilière (IFI) applies to net property assets exceeding 1.3 million euros. If your property investment in Megève falls into this category, it will be included in the IFI tax base.

There are ways to limit this tax, but it’s essential to optimally structure the investment from the outset.

Our support services

As an accounting firm with extensive experience assisting international investors, we support you at every stage of your investment in Megève. We offer guidance on:

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Choosing the legal structure best suited to your project;

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Managing rental income and optimizing your tax position;

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Declaring your income in France and preparing your Impôt sur la Fortune Immobilière (IFI) tax returns;

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Complete monitoring of your accounting and tax obligations in France.

With in-depth expertise in real estate and international taxation, we provide personalized support to help you maximize the success of your investment in Megève.