VAT rate for renovation work on a dwelling

Verified 13 November 2023 - Directorate for Legal and Administrative Information (Prime Minister)

Renovation works carried out in an old housing benefit from reduced VAT rates under certain conditions. The rate may be 5.5% or 10% depending on the service provided. Renovations to social rental housing can also benefit from a reduced rate. In Guadeloupe, Martinique and Reunion, the rate applicable is 2.1%.

Where work is carried out on certain types of premises, such services may be subject to a reduced rate of VAT.

The premises must meet the following conditions:

  • It must have been completed more than 2 years.
  • It must be intended to be assigned or be assigned to a residential use. The accommodation spaces which meet the conditions for access to one of the reduced rates are, for example:
    • Detached house
    • Accommodation located in a public building
    • 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 (e.g. cellar, attic, garage, loggia, terrace, building yard)
    • 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 applicable VAT rate varies according to the type of work.

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Improvement, conversion, fitting-out or maintenance work

The applicable VAT rate is 10%.

It concerns in particular the following work:

  • 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
  • Work on roof extensions (pergolas, awnings, awnings...) which cover surfaces adjacent to the already existing construction. The roof projection shall not increase the floor area of the existing construction and shall not be of a structural design (framework of a building).

The part of the work which corresponds to the supply of household equipment, furniture or the acquisition of large items of equipment supplied in connection with work to replace a heating system or an elevator shall not be subject to the reduced rate. This is also the case when the work concerns the installation of sanitary or air conditioning systems.

FYI  

In Guadeloupe, Martinique and Reunion, the rate applicable is 2.1%.

Renovation or energy improvement works

The applicable VAT rate is a reduced rate to 5.5%.

It applies, for example, to works layout, installation and maintenance energy-saving materials and equipment which meet minimum technical and performance criteria.

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

  • Condensing boiler.
  • Micro-cogeneration gas boilers with an electric power output of not more than 3 kilovolt-amperes per housing.
  • Materials for thermal insulation of opaque or glazed walls, insulating shutters or entrance doors opening to the exterior
  • Materials for insulating all or part of an installation for the production or distribution of heat or domestic hot water
  • Heating control apparatus
  • Energy production equipment using a renewable energy source. This does not apply to electricity generation equipment using solar radiative energy or heat pumps other than air/air, the main purpose of which is the production of heat or domestic hot water.
  • Underground heat exchanger for geothermal heat pumps
  • Equipment for connection to a heat network, supplied mainly by renewable energy sources or by a cogeneration plant

FYI  

In Guadeloupe, Martinique and Reunion, the rate applicable is 2.1%.

In order to benefit from a reduced rate, the customer must draw up and submit to the supplier a self-certified statement indicating that the services provided fulfill the conditions for benefiting from a reduced rate of VAT.

The certificate must contain information on the identity of the customer or his representative, the nature of the premises and the nature of 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

It must be established in 2 copies.

One must be given to the service provider, who must add it to his accounts as evidence for the application of the reduced rate of VAT on his invoice.

The other must be retained by the customer until 31 December of 5e year which follows the issuing of invoices. For example, for work invoiced in 2023, the licensee must retain the documents until December 31, 2028.

In the event of an error in the rate applied when invoicing from a certificate containing inaccurate information, the customer may be obliged to participate in the refund of the missing amount.

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

It must be established in 2 copies.

One must be given to the service provider, who must add it to his accounts as evidence for the application of the reduced rate of VAT on his invoice.

The other must be retained by the customer until 31 December of 5e year which follows the issuing of invoices. For example, for work invoiced in 2023, the licensee must retain the documents until December 31, 2028.

In the event of an error in the rate applied when invoicing from a certificate containing inaccurate information, the customer may be obliged to participate in the refund of the missing amount.

The following renovations are subject to the normal rate of 20% VAT:

  • Renovation work carried out on premises not used for housing. Examples are offices or buildings for agricultural use.
  • Building upgrade or refurbishment completed less than 5 years ago.
  • Work to increase the floor area of existing premises by more than 10%
  • Development and maintenance work on green areas
  • Demolition works which do not involve renovation works benefiting from a reduced rate of VAT

Equipment purchased directly by an individual to be settled by a company is subject to the standard 20%. Only the installation service can benefit from a reduced rate of VAT if it fulfills the conditions of application.

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