Reduced VAT rates on property renovations in France – your dream of this second home may just have come a bit closer

04 Sep 2017

Towards the end of this year’s summer holiday season, like many others you might dream of having a second home in France or even move there permanently. 

You may know that the standard VAT rate in France is 20%. But did you also know that subject to certain conditions, you may qualify for a reduced rate of 10% on work of improvement, conversion and repair of a residential property. 

This rate is further reduced to 5.5% if the work you carry out leads to energy conservation and is eligible for the energy saving tax credit.

Some basic rules apply:

* The property can be your main residence or your second home as long as it is at least 2 years old;
* All routine repair and maintenance work as well as renovation and improvement work is eligible for the reduced rate;
* The same is true for an increase in size as long as the net surface of the property is not increased by more than 10%;
* The reduced rate is only available on materials bought from and/or work carried out by a professional registered in France;
* You will have to sign a certificate for the builder and you must retain a copy of it for 5 years so that you can produce it should you receive a request from the French tax authorities.And some pitfalls exist: 

And some pitfalls exist:

* If you buy a ruin and renovation/rebuilding work is very significant, the French tax authorities may reclassify your project as a new built. In this case the standard rate of VAT will apply;
* Swimming pools, tennis courts, garages and other large extensions are not eligible for the reduced rate of VAT.

Should you have questions and before you start work on that French country retreat, contact Bettina Cassegrain (This email address is being protected from spambots. You need JavaScript enabled to view it.) and Stéphane Sintes (This email address is being protected from spambots. You need JavaScript enabled to view it.) at French HLB member firm COGEP for some hands on advice. 

 

 

 

 

 

 

 

 

 

 

 

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For more information

Bettina Cassegrain Bettina Cassegrain

Head of International Business Development

COGEP
France
Phone: +33 (0) 248681485

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