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3. Home Energy Conservation in France
3.1. Tax Credits in France for Home Energy ConservationTax credits are available for heating and energy saving works to your French home. A 'tax credit' needs to be distinguished from 'tax relief'. While the latter offers only a reduction in the amount of income tax payable, a tax credit entitles you to a payment by the tax authority, even if you pay no income tax. If are eligible to receive a greater sum than you actually pay in tax, then the taxman will send you a cheque for the balance. The allowance is called crédit d’impôt développement durable. It is only available to those who a property in France as their principal home, so second home owners are not eligible. Landlords of unfurnished accommodation are also eligible, provided the tenant (who must not be a member of their family) occupies the property as their principle home, and the landlord lets the property for at least 5 years. The eligible works includes most types of home energy conservation, provided the installation meets agreed performance standards. You need to discuss these standards with your installer to make sure the works comply with the regulations. In most cases the tax credit is only available for the costs of the materials, and only then provided they are purchased and installed by a registered artisan or company. There are a couple of important exceptions to this rule. The first relates to the installation of roof and wall thermal insulation, for which the tax credit can cover the same percentage of the labour cost, provided the project is undertaken in its entirety by a registered builder. The labour costs associated with laying of the pipework for geothermal heating pumps are also eligible. In no case would you be eligible for the tax credit if you purchased the materials yourself, or you undertook the installation works. All types of residential property are eligible for the tax credit, although in relation to thermal insulation and condensing boilers the property must be at least two years old. The main works for which the tax credit is granted, and the percentage tax credit that applies, for 2011 and 2012 are:
* Only available as part of a package of other works of energy conservation. The column 'Package 2012' concerns the rate available where are least two elements are undertaken as part of a package of works - bouquet de travaux. The basic rates are increased by 8 percentage points. However, not all works are eligible for the package, as some can only be included if the property is at least two years old. Nevertheless, it clearly makes sense to consider at least two elements of energy conservation to obtain the higher rates then available. There is a lot of small print in the regulations, not all of which we can go into here. In particular, the cost of some ancillary items relating to the these works is not always an eligible cost, so you may not be able to charge the full cost of the installation, materials or equipment to the tax credit. If you install thermal insulation in an attic space in order to create new living space, you will not be eligible for the tax credit. The tax credits for thermal insulation and double glazing are not available for new properties under the course of construction. Double glazing is also only availalbe a a package with other works. If in doubt (and the regulations are quite complex), you should contact your local energy efficiency office, the Agence de l'Environnement et de la Maîtrise de l'Energie (ADEME). There are maximum limits on the level of the tax credit that can be granted, although these are quite generous. Thus, the maximum for one person is €8000, and €16,000 for a couple, which is increased by €400 for each additional person in the household. The allowance can be received over a five year period. No means testing is carried out. At the present time, the tax credit is available until 2015, but the standards to be achieved are being increased each year and the level of the tax credit is being reduced. Indeed, there are regular changes to the level of the tax credit, the work and equipment that is eligible, and the relevant minimum standards, so you need to be sure of your ground. In order to claim the tax credit, you need to send in the invoice from the builder with your tax return. Accordingly, you may not receive your tax credit for a year or more after you carried out the works, so you need to be budget accordingly. 3.2. Eco LoanAn interest free loan (Eco Prêt) for the cost of works of home energy conservation is available The works can include loft insulation, and other types of work as listed above, but must be a package of works (bouquet de travaux), not a single element.
Eligible properties are those constructed before 1st January 1990. You will be required to have a thermal survey of your property undertaken. You need to make application to your local energy efficiency office, the Agence de l'Environnement et de la Maîtrise de l'Energie (ADEME). After completing a form (which can be downloaded from their website) and obtaining one or more estimates, you then need to make formal application to your bank. This loan is available with the tax credits provided your income is less than €30,000. This means that not only could be be granted a tax credit for the works, but you could also take advantage of the tax free loan as part of the funding package. The reference year for assessing your eligibility is two years prior to the offer of the loan, ie for a loan in 2012, it is your income for 2010 that is used. If your income is above €30,000 then you can still make application for the loan, but you would be ineligible for the tax credit. You need to work out the sums to see what works best for you. 3.3. Interest Free French Mortgages for Energy ConservationThere are interest free mortgages available through the high street banks for works of home energy conservation. You can read more at French Mortgages for Home Energy Conservation. The banks also offer their own 'eco-loans', which you may be able to use to top up any shortfall in the interest free loan. 3.4. Rate Relief/Local Council Assistancei. New HomesThere is partial (50%) or full exemption from the taxe foncière for up to 5 years, for those new homes constructed since 1st January 2009 to an energy efficiency standard that is higher than the regulations currently in force. This exemption is at the discretion of the local authorities, although it is widely adopted. The exemption is also cumulative with the general exemption of two years granted to all new homes, provided completion is notified to the tax authority within 90 days of completion. This would mean you would be exempt from the tax for seven years! The energy efficiency standard that applies in 2012 is 'bâtiment basse consommation énergétique BBC 2012' or the label 'haute performance énergétique'. You would need to make enquiries at your local tax office to whom you will need to produce bills, and details of the works, as well as a report indicating the level of energy performance achieved by the property. ii. Older HomesLocal authorities are also permitted to exempt from the taxe foncière those older homes that have had important energy conservation works carried out to them. This exemption applies to those dwellings built before 1989, whether your main home or any property you may let out. It is also on condition that the expenditure in the previous year on such works exceeds €10,000, or 15,000 over the previous three years. The cost of labour is excluded from this calculation, although it does include VAT. The exemption is at the rate of 50% to 100% for a period of up to five years. Once again you would need to discuss with your local tax office. iii. Loans and GrantsThere are also a surprising number of local, departmental, or regional councils who offer grants or loans towards energy saving equipment, notably towards the installation of solar panels. Check with your local mairie in the first instance, or the web site of your Conseil Régional. Be aware that some other assistance you may recive, such as a national grant, may be offset against the assistance you recive from the local council, although not in all cases, notably with rate relief. Next: Elderly/Disabled Adaptations Back: Financial Assistance for Property Renovation in France Couldn't find what you are looking for? Search again now!! The Guides to France are published for general information only. Please visit our Disclaimer for full details. |
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