Local Rates Exemption on Energy Conservation Works
Tuesday 04 April 2017
An exemption from the tax fonciere is available for up to 5 years on completion of home energy conservation works.
The taxe foncière is one of the two local rates payable on the ownership and occupation of property in France, the other being the taxe d'habitation.
The exemption from the tax is available for both new and existing homes, either principal residence or second home, as follows:
There is partial (50%) or full exemption from the tax 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. That once used to be an obstacle that was fairly easy to get over, but with the increase in energy standards in recent years it is less so today.
This exemption is at the discretion of the local authorities, although it is widely adopted.
The exemption is also cumulative with the general exemption from the taxe foncière for two years granted to owners of 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!
Local 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 or second 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.
Eligible works are those that would also qualify for a tax credit, amounting to 30% of the cost of the works, such as:
* Double glazing
* Insulating shutters
* Wall and floor insulation
* Central heating controls
* Heat pumps and boilers using renewal energy
* Wood or biomass equipment for space heating and/or hot water
* Combined heat and power
* Solar based hot water heating systems
Strict minimum standards apply in relation to these works, which must also be carried out by a certified professional (RGE - Reconnu Garant de l’Environnement) and for which an energy study would be necessary.
The exemption is at the rate of 50% to 100%, as determined by the local council, for a period of up to five years.
You would be best advised to first discuss your plans with your local energy advisory office Rénovation info service, a free public service.