Most building work on residential property in France benefits from a reduced rate of VAT of 10%, instead of the standard 20% rate.
The reduced rate applies provided the property is at least 2 years old.
At the completion of the works, the builder is required to provide the customer with a certificate which they must sign, confirming the eligibility of the works for the reduced rate.
As a result of a change in the law, this certificate is no longer required.
From now on, the customer simply has to certify, directly on the quote or invoice, that the work:
concerns a residential premises completed more than two years ago;
does not contribute to the production of a new building, eg, garage;
does not create a new storey;
does not increase the floor area by more than 10%, (although transformation of an attic space is permitted on certain conditions).
At the same time, the customer must keep a copy of the estimate and invoice until 31st December of the fifth year following the completion of the work.
In the event of a false declaration both builder and client are liable for penalties on the difference between the standard and reduced rate.
Major renovation works on a property over a 2-year period that effectively involve 'reconstruction' are not eligible for the reduced rate. This arises where the works involve the renewal of at least two-thirds of the internal elements of the property (sanitary, plumbing, electrics, doors, flooring, heating, internal cupboards) and/or at least 50% of three structural elements (to the exclusion of renovation of the facade of the building).
Neither is major equipment such as collective heating systems, lift, or air conditioning eligible for the reduced rate.
Conversely, most works to improve the energy efficiency on a property are eligible for an even lower rate of VAT of 5.5%. Building works necessary for the installation of green energy materials and equipment are also eligible for the reduced rate, eg, electrical and plumbing works.
Only materials and equipment supplied by the builder are eligible for the lower rate, although the building work itself would be eligible for the lower rate.
Since 1st Jan the standard rate of 20% applies on the purchase and installation of gas boilers.
