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VAT rate for renovation of a dwelling

Verified 17 November 2020 - Directorate for Legal and Administrative Information (Prime Minister)

Renovation works carried out in old housing benefit from reduced VAT rates under certain conditions. Reduced VAT 5.5% or at the intermediate rate 10% is reserved for the improvement, transformation, fitting out and maintenance work on residential dwellings completed for more than 2 years. In Guadeloupe, Martinique and La Réunion, the applicable rate is 2.1%..

To qualify for a reduced VAT rate, the premises must be completed for more than 2 years at start of work and assigned to the dwelling only.. Whether it is a principal or secondary residence, or whether they are being held, rented or occupied free of charge.

If the accommodation does not meet these conditions, the work shall be subject to the normal rate of 20%..

The units which fulfill the conditions of access to one of the reduced rates are the following:

  • Individual house
  • Accommodation in a common building, whether for private or common areas
  • Light dwellings (mobile homes), houseboats fitted out for the dwelling and moored at a fixed point, as long as they are taxed to the housing tax
  • Usual dependence of a dwelling, even not contiguous to the dwelling (cellar, attic, garage, loggia, terrace, court of building, etc.)
  • Establishment of collective accommodation for natural persons: tourist establishment exempt from VAT or social establishment whose main object is accommodation
  • Function Housing

The customer of the work eligible for the reduced rate must be in one of the following categories:

  • Landlord owner (who offers accommodation for rent)
  • Owner occupier
  • Co-owners Union, which manages the work for the co-ownership
  • Civil real estate company, which manages the premises
  • Tenant or single occupant free of charge

A real estate agency that has works carried out on a house it rents out may benefit from these reduced or intermediate rates.

A merchant who sells these premises for resale may also benefit.

VAT rates applicable according to the nature of the work

Nature of work

Examples

Rate

Improvement, transformation, fitting-out or maintenance

- Emergency work on a collective boiler or an elevator. However, the work must not lead to the replacement of the equipment and thus the delivery of new equipment.

-Works to supply water to a residential building completed 2 years ago

- Stormwater drainage works

- Closing work, installation of a gate

Intermediate to 10%

Renovation or energy improvement work

Installation, installation and maintenance of energy-saving materials and equipment, respecting minimum technical characteristics and performance criteria: condensing boiler, heat pump other than air/air, thermal insulation, heating or renewable energy control apparatus, etc.

Reduced to 5.5%

Induced work, inseparably linked to energy efficiency work

Displacement of radiators or soil removal

Other renovation or aesthetic work (dressing of an insert, laying of wallpaper, etc.) are excluded.

Reduced to 5.5%

To make the 5.5% or applied, the induced works must be invoiced within 3 months at the latest from the date of invoicing of the energy quality improvement works to which they relate.

Warning  

in Guadeloupe, Martinique and Réunion, the applicable reduced rate shall be 2.1%..

VAT at the intermediate or reduced rate may not be applied to the following works or purchases:

  • Renovation work in non-residential premises. For example, professional premises, offices, agricultural buildings (barn, stable, greenhouse..), commercial tourist accommodation (hotel)
  • Development, cleaning and maintenance of green areas (including landscaping)
  • Supply of household or household equipment
  • Acquisition of large-scale equipment for installation or replacement of the heating system (excluding energy-saving work), sanitary or air-conditioning system

In all these cases, it is the normal rate of 20% which must apply.

The intermediate or reduced rate does not apply to major works which are more than just a renovation:

  • Building elevation or addition
  • Refurbishment of more than half of the large work (foundations, frameworks, supporting walls, facades outside redevelopment)
  • Refurbished to more than 2/3 of each of these 6 elements: non-load-bearing floors, exterior doors, partitions, sanitary installations, plumbing, electrical installations and heating
  • Increase floor area of existing premises by more than 10%

Warning  

only work and equipment invoiced by a company is affected. Equipment purchased directly by the individual for installation by a company shall be subject to the normal rate of 20 % only the post benefit benefits from the intermediate or reduced rate.

It is possible to charge at the intermediate or reduced rate if a certificate confirms that compliance with the conditions of application over the 2-year period is given to the professional before invoicing..

Each time a work provider intervenes, the certificate must be completed by the person who causes the work to be performed (the client of the work providers). These are the owner or landlord, tenant, syndicate of co-owners in particular.

If more than one service provider intervenes on the site, an original certificate must be given to each of them.

Attestation is required only for work that exceeds €300 TTC.

Below this amount, the following information must appear on the invoice:

  • Name and address of the client and the building to be worked on
  • Nature of work
  • The statement that the building has been completed for more than 2 years

The certificate, the invoices and the notes issued by the supplying companies must be kept until the end of the 5e year following the date of the works. These documents are used to justify reduced or intermediate VAT invoicing.

Example :

The certificate must be kept until 31 December 2020 if the work was completed in 2015.

The work provider may keep in an electronic format reproducing, in the same and lasting manner, the original of the document submitted by the client and not subject to change.

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