Red Light for Green Revolution
Tuesday 16 November 2010
The government is continuing to nibble away at financial assistance towards home energy conservation.
As we reported recently in our article Tax Breaks for Solar Panels Reduced, at the end of September the grant for the installation of photovoltaic solar power panels was reduced from 50% to 25%.
In their draft finance bill for 2011, the government is also cutting back on other financial incentives that are currently available for undertaking home energy efficiency works.
In general, there is to be a 10% reduction in the tax credits (crédit d'impôt développement durable).
Although full details have yet to be published, it seems the tax credit for the installation of double glazing reduces from 25% to 22.5%, whilst that for a heat pump down from 40% to 36%. The tax credit for geothermal heat pumps will also go down from 40% to 36%.
Other types of energy conservation works will face similar reductions.
In addition, the government has also decided that they will no longer allow households to benefit simultaneously from both an interest free ‘eco-mortgage’ and a tax credit for such works.
The éco-prêt à taux zéro launched in 2009 is an interest free loan of up to 15 years for a package of energy conservation works.
When combined with the tax credits (in the form of a grant if you do not pay income tax) also available, it has been a very enticing offer for home owners.
From January 2011 you will need to choose between an interest free loan or a tax credit for home energy improvements.
The former is means tested (although with generous thresholds), but is subject to undertaking a package of energy conservation works.
The tax credit is available to anyone living in an eligible property, and for any one or more works from an approved list.
In both cases you will need to be fiscally resident in France to be eligible.
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This article was featured in our Newsletter dated 16/11/2010
