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VAT rate for renovation work on a dwelling

Verified 16 June 2021 - Directorate for Legal and Administrative Information (Prime Minister)

Renovation works carried out in an old dwelling benefit from reduced VAT rates under certain conditions. VAT at the reduced rate of 5.50% or at the intermediate rate of 10% is reserved for the improvement, transformation, fitting-out and maintenance work on residential units completed more than 2 years ago. In Guadeloupe, Martinique and Reunion, the rate applicable is 2.1%.

In order to benefit from a reduced rate of VAT, the premises must be completed for more than 2 years at the start of the works and for housing only. This reduced rate also applies to works which are inextricably linked to this energy renovation work. For example, drilling and earth-moving work for the installation of the underground heat exchanger for geothermal heat pumps. Whether it is a primary or secondary residence, or whether they are held, rented or occupied free of charge.

If the dwelling does not meet these conditions, the works are subject to the normal rate of 20%.

The dwellings eligible for one of the reduced rates are as follows:

  • Detached house
  • Accommodation located in a public building, whether for private or communal areas
  • Lightweight dwellings (mobile homes), barges fitted for the dwelling and moored at a fixed point, as soon as they are imposed on the housing tax
  • Usual dependence of a living space, even if not adjacent to the living room (cellar, attic, garage, loggia, terrace, building yard, etc.)
  • Establishment for collective accommodation of natural persons: a tourist establishment to which VAT does not apply or a social establishment whose main purpose is accommodation
  • Function housing

The customer of the works eligible for the reduced rate must belong to one of the following categories:

  • Landlord (who offers accommodation for rent)
  • Owner Occupant
  • Union of co-owners, which manages the work for the co-ownership
  • civil real estate business, which manages the premises
  • Free tenant or sole occupant
  • Real estate agency which arranges for work to be carried out on a dwelling which it rents out
  • Merchant of goods for resale

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General case

Improvement, conversion, fitting-out or maintenance work

The VAT rate is an intermediate rate at 10%.

It applies, for example, to the following tasks:

  • Emergency work on a collective boiler or an elevator. However, the work must not result in the replacement of equipment and therefore the delivery of new equipment.
  • Water supply works for a residential building completed 2 years ago
  • Stormwater Disposal Work
  • Fence work, installation of a gate
Renovation or energy improvement works

The rate of VAT applied to these types of works is a reduced rate to 5.50%.

For example, it applies to installation and maintenance work on energy-saving materials and equipment that meet minimum technical and performance criteria.

This concerns, for example, the following equipment and works:

  • Condensing boiler
  • Heat pump other than air/air
  • Thermal insulation
  • Apparatus for controlling heating or producing renewable energy

So that the 5.50% or applied, the resulting works must be invoiced within three months of the date of invoicing of the energy quality improvement works to which they are related.

Induced work, inseparably linked to energy efficiency work

The rate of VAT applied to these types of works is a reduced rate to 5.50%.

It applies, for example, to the displacement of radiators or to the removal of floors.

It does not apply to renovation or aesthetic work (dressing of an insert, laying of wallpaper,...).

So that the 5.50% or applied, the resulting works must be invoiced within three months of the date of invoicing of the energy quality improvement works to which they are related.

Guadeloupe, Martinique, Réunion

Improvement, conversion, fitting-out or maintenance work

The VAT rate is an intermediate rate at 10%.

It applies, for example, to the following tasks:

  • Emergency work on a collective boiler or an elevator. However, the work must not result in the replacement of equipment and therefore the delivery of new equipment
  • Water supply works for a residential building completed 2 years ago
  • Stormwater Disposal Work
  • Fence work, installation of a gate
Renovation or energy improvement works

The rate of VAT applied to these types of works is a reduced rate to 2.1%.

For example, it applies to installation and maintenance work on energy-saving materials and equipment that meet minimum technical and performance criteria.

This concerns, for example, the following equipment and works:

  • Condensing boiler
  • Heat pump other than air/air
  • Thermal insulation
  • Apparatus for controlling heating or producing renewable energy

So that the 2.1% or applied, the resulting works must be invoiced within three months of the date of invoicing of the energy quality improvement works to which they are related.

Induced work, inseparably linked to energy efficiency work

The rate of VAT applied to these types of works is a reduced rate to 2.1%.

It applies, for example, to the displacement of radiators or to the removal of floors.

It does not apply to renovation or aesthetic work (dressing of an insert, laying of wallpaper...).

So that the 2.1% or applied, the resulting works must be invoiced within three months of the date of invoicing of the energy quality improvement works to which they are related.

Warning  

only works and equipment invoiced by a company are concerned. Equipment purchased directly by the individual to be settled by a company is subject to the standard 20% only the installation service benefits from the intermediate or reduced rate.

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

  • Renovation work carried out in premises for non-residential use. For example, business premises, offices, buildings for agricultural use (barn, stable, greenhouse...), commercial tourist accommodation (hotel)
  • Works for the fitting-out, cleaning and maintenance of green spaces (notably landscaping)
  • Supply of household or furniture equipment
  • Acquisition of major equipment for the installation or replacement of the heating system (except energy-saving work), sanitary or air-conditioning installation

The intermediate or reduced rate shall also not apply to major works which are more than a mere renovation:

  • Building elevation or addition
  • Refurbishment of more than half of the main structure (foundations, frameworks, load-bearing walls, facades without renovation)
  • Refurbishment at more than 2/3 of each of these 6 elements: non-load-bearing floors, exterior doors, partitions, sanitary facilities, plumbing, electrical installations and heating
  • Increase in floor area of existing premises by more than 10%

In all these cases, it's the normal rate 20%of whom should apply.

Warning  

only works and equipment invoiced by a company are concerned. Equipment purchased directly by the individual to be settled by a company is subject to the standard 20%. Only the installation service benefits from the intermediate or reduced rate.

It is possible to charge at the intermediate or reduced rate if a certificate confirming compliance with the conditions of application of the reduced rate to energy renovation works over the period of 2 years is given to the trader before billing.

Each time a work provider intervenes, the certificate must be completed by the person who causes the work to be carried out (who is the client of the service providers). This is the owner-occupier or landlord, tenant, or condominium syndicate in particular.

If more than one supplier is involved in the work, each of them must be given an original of the certificate.

The certificate for secondary works is compulsory only for works exceeding €300 TTC.

However, the customer must include the following information on the invoice:

  • Name and address of the customer and of the building to which the work relates
  • Nature of work
  • Mention that the building has been completed for more than 2 years

This certificate is to be given to the contractor carrying out the work.

Works of heavy construction

For major works, the certificate to be sent is as follows:

Standard certificate for VAT applicable to works in dwellings

Secondary works (repair and maintenance)

For secondary works, the certificate to be sent is as follows:

Simplified certificate for VAT applicable to works in dwellings

The certificate, invoices and notes issued by the companies providing services must be kept until the end of the 5e year according to the date of the work. These documents are used to justify the invoicing of VAT at a reduced or intermediate rate.

Example :

The attestation must be retained until December 31, 2021, if the work was completed in 2016.

The work provider may keep the original of the document submitted by the client in an electronic format which is identical and durable and which cannot be modified.

The certificate, invoices and notes issued by the companies providing services must be kept until the end of the 5e year according to the date of the work. These documents are used to justify the invoicing of VAT at a reduced or intermediate rate.

Example :

The attestation must be retained until December 31, 2021, if the work was completed in 2016.

The work provider may keep the original of the document submitted by the client in an electronic format which is identical and durable and which cannot be modified.

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