Drawing up a realistic budget is one of the most important parts of making a success of buying and owning a ski property. As you’ll know from our article on the costs of purchasing, there are several factors to account for before completion. However, you should also have a robust purchase for once you’re an owner, to save you from any headaches further down the line. So, what are ongoing costs of a ski home?
Whether you’re using your property solely yourself, or renting it out, you need to have a budget for regular maintenance and a contingency for anything unexpected. Many owners, given that the property is to be used for a holiday, will engage a cleaner to keep it in good shape inside. Naturally, the cost will vary depending on how you use the home – if you’re renting it out, you’ll probably need more regular deep cleans, and include things like changing the beds, washing linen and so forth, between stays.
If you have a jacuzzi or even a swimming pool, you’ll need to budget for water and electricity for pumping, heating, dehumidification, and for maintenance products like disinfectants, a water analysis kit and so on. A rough estimate of these costs can be difficult, because of the variation of size and tariffs, but you
If you’re renting out your property, budget for irregular changeovers – you might have a period with several short stays, where you’ll need a full changeover service, or find yourself with periods with fewer than expected. As well as cleaning, you’ll need someone to handle deposits, key collection and handover, check the property for any damage and liaise with the client to arrange airport pickups and answer any questions they have.
Make sure when drawing up your original budget to include insurance as one of the ongoing costs of a ski home. Anyone with a property should have home insurance (and it is a legal requirement in some properties, such as ‘copropriété’ in France, which is a type of condominium).
If you rent out, you should definitely ensure that all contents are covered, but also that you are legally covered against any eventualities. In many European countries, there exists the concept of civil liability, whereby an individual is automatically considered responsible for some acts, without the victim needing to make a claim, and also hold responsibility for any objects they own (which could cause someone else damage, for example).
There is a wide range of legal solutions out there, and it’s worth shopping around for the best deal. Some insurance companies offer a special kind of insurance, known as MRH propriétaires non-occupants in France and Switzerland, which insures owners who aren’t occupying their property themselves during periods when they have no tenants. Keep an eye out for duplication, too – you may have two policies which needlessly both cover civil liability, for example.
If you rent out your property, you may also be recommended to take out a form of professional insurance as a self-employed person.
Cross-border taxes can be one of the more complicated ongoing costs of a ski property, so it is usually worth engaging a professional to help. Generally, you’ll pay some form of a property tax as an owner. In Switzerland, for instance, this is around 0.3-0.5% of the canton, depending on the canton. In France, for the moment, you’ll pay the taxe foncière, based on the cadastral value of your house, and, if you occupy the property, the taxe d’habitation. The latter, however, is currently in process of being abolished.
If you rent out the property, you will need to pay income tax on that revenue. If your home country doesn’t have a double-taxation agreement – which is a relatively rare situation these days – then you may find yourself having to pay twice.
Paying for ongoing costs
Make sure that you factor in the currency markets if you’re paying for these costs from abroad. You’ll find what should be fixed costs are constantly changing with the exchange rate, making it difficult to budget. Discover how to secure a fixed exchange rate with a forward contract in the Property Buyer’s Guide to Currency.