How much does it cost to rent a luxury villa in the South of France?

A company owned a property“consisting of a 27,078 m² plot extending to the cliff overlooking the Mediterranean Sea, featuring a park, a pine grove, an infinity pool, a tennis court, a terrace overlooking the bay, a beach, and a small private harbor accessible by a staircase, as well as various structures, including six main buildings—one of which is a “Belle Époque”-style villa with a floor area of 250 m², and three of which house a reception hall, a screening room, and a suite with a pool and sauna—and buildings to be renovated.”

She had made the villa available to one of her business partners for a rent of approximately 66,000 euros per year.

Following a tax audit of the company,administration determined that the rent was too low and that the company should have charged a higher rent. They calculated the rent as follows:

• by determining the market value of the property through comparison with other properties located in Saint-Tropez, Cavalaire, Gassin, and Le Rayol-Canadel-sur-Mer;

• and by initially applying a rate of return of 4.5% to this market value, which will then be reduced to 3.5%.

administration thereforeadministration that the rent should have been between €280,000 and €315,000 and adjusted the company’s tax assessment accordingly.

The Administrative Court of Appeals upheld the tax assessment, ruling in particular that it was irrelevant whether, during a previous audit,administration had determined the rent based on the assessed rental value.

CAA Marseille, May 22, 2025, No. 23MA02225

This monitoring service is provided by Mispelon Avocat, a law firm specializing in tax audits and tax litigation. You can stay updated by subscribing to the newsletter via this link.