Moving Property Investments from the UK to the Alps: From Buy-To-Lets to Buy-To-Ski
Buy-to-lets have long been a go-to investment for UK nationals looking to expand their asset portfolio’s. Whether as a holiay home or business venture, property has always been a stable and steady source of income, though in April 2016 this changed. New stamp duty fees were introduced, significantly increasing the costs of owning a second home. Immediately, buy-to-let homes were hit with a 3% increase in stamp duty, and this only increased with property value. Stamp duty fees for second homes over £250k were increased to 8% whilst properties worth over £1.5million incurred a massive 15% stamp duty fee.
Despite these increases in stamp duty, property is still one of the most popular portfolio investments and more savvy purchasers have decided to invest their money overseas to avoid these whopping fees, and make the most of their second home as well. Purchase costs of a new-build in France are around 2.5%, and in Switzerland these fees range between 3-5% making the Alps a popular property investment alternative.
Buy-To-Lets in France
The French ski property market for holiday lets is hugely successful thanks to the popularity of French ski resorts. Seasonal lets and leasebacks can be an easy and reliable way to generate income if the property is in a good location and marketed well, and means that you have access to your own ski home too making it an excellent lifestyle investment.
Leasebacks in ski resorts come with the opportunity to use the property a few weeks each year. They are looked after by reputable management companies and there are various tax rebates including a complete VAT rebate on new-build properties, tax exemptions of up to €100k when gifting the property to descendants and the option of renting to family members. French mortgage rates also remain at a historic low with LTV’s of up to 85% and interest rates of between 2-3% for non-residents.
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Leasebacks aren’t the only option when it comes to buy-to-let properties. Buying a re-sale home in a popular ski resort such as Chamonix or Val d’Isere can be a fantastic way to invest and make income on seasonal or weekly lets as these well-known resorts can demand high rents. Local management agencies and websites such as AirBnb or HomeAway make this a viable option, and often you are given more flexibility of your own use of the ski home than when purchasing a leaseback.
Buy-To-Lets in Austria
Austria is pretty new to the world of Alpine holiday homes, but it is quickly becoming a key-player in the Alpine property market. With some of Europe’s most picturesque ski resorts, lots of snowfall and the fastest-growing summer tourism levels in the EU, investment in the Austrian ski property industry is growing rapidly. With strong tourist trade in summer and winter, rental yields are reasonable and reliable with ski property averaging a growth of 4%/year.
There are several restrictions on non-Austrian nationals purchasing a new home to ensure ski resorts don’t fall victim to too many empty beds. In the most popular ski resorts, property is purchased as a “rental property” rather than a second home which means there is an obligation for the property to be available for rent when the owner isn’t occupying it. Despite these retnal obligations, many of them have the flexibility to be rented privately to friends and family, and owners can spend up to 6 months a year there.
Tax benefits on buying a “rental property” in Austria include VAT discounts on the purchase, and an €11k tax exemption per person per year on income tax if you rent your property to holiday makers.
Buy-To-Lets in Switzerland
Although not a traditional buy-to-let market, the stability and steady increase in the value of Swiss ski property remains attractive to prospective investors. Much like Austria, there are certain rental obligations in place to avoid empty beds.
Switzerland does not have a government VAT refund scheme but some resorts are suitable as rental investments, particularly those in Canton Valais such as Les Collins which has access to the Verbier ski area and has low taxes and running costs. Switzerland has some of the lowest mortgage rates in the world (2-3%), and repayments on a Swiss mortgage would be very low.
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Find out how to get a mortgage in the French, Swiss, Austrian or Italian Alps.
Read more about the best ski resort for your ski property purchase.
Get some tips on how to get the most out of your currency exchange.
Know what lies ahead with the purchase process our buying guides to property in Switzerland, France, Austria & Italy.