Reduced VAT for French renovation work: new ‘simplified’ guidelines

Published 18th Jan 2007

The French tax authorities have issued new ‘simplified’ forms for people hoping to pay reduced VAT on their home renovation.

The move followed complaints that the process in getting the tax rate reduced from 19.6 per cent to 5.5 per cent had become too complicated during reforms carried out last year.

Two forms – one simplified, the other more detailed – can be downloaded from the government website.

The authorities have also clarified which types of project are eligible for the VAT reduction.

The saving only applies for buildings more than two years old and, crucially, where the work being carried out does not amount to creating a new home.

Key structures

According to the guidelines the renovation must not consist of making new more than half of a building’s key structures such as the foundations or supporting walls – gros œuvre as they are called in the rules.

Nor can the work involve making as new more than of two thirds of all defined lesser works - second œuvre - such as partition walls, heating and electricity works. And the floor area of the building cannot be extended by more than 10 per cent.

The guidelines also make it clear that it is up to the person having the work done – the home owner - to vouch through signing the form that the required work conforms with the reduced VAT rules.

The form or attestation should be kept by the customer for a full five calendar years after the work is done in case the tax authorities want to investigate the case.

The organisation representing artisan builders the Confédération de l’Artisanat et des Petites Entreprises du Bâtiment or CAPEB welcomed the news. They say the new guidelines and forms simply the issue – but without changing the criteria for a VAT reduction.

CAPEB, who have been negotiating on the matter with the authorities, say they are also pleased that the guidelines protect artisan builders from being saddled with paying the difference in tax rates if the work does not meet the rules.

Home owners are being advised to discuss with the builder whether the building work complies with the new rules once an estimate or devis has been given.

The forms and guidance are available at:
http://www.impots.gouv.fr/portal/dgi/home?pageId=home&sfid=00

Click on: ‘Taux de TVA réduit pour les travaux réalisés dans les logements’.

This will open a pop up window with the guidelines and pdf files to download. The attestation simplifiée is for renovation work not involving any major structural change and no more than five of the six defined ‘secondary works’.

By Michael Streeter

Source: ' French Entree '

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