Increased Grant for Energy Conservation Works
Tuesday 07 October 2014
In a significant relaxation of existing rules the government have increased to 30% the level of the grant for any single work of home energy conservation.
The most notable of these is the Crédit d’Impôt Développement Durable (CIDD).
The CIDD comes in the form of a 'tax credit', equivalent to a reduction in income tax to the percentage level of the credit. If you do not actually pay income tax it comes in the form of a grant.
Between 1st January and 31st August 2014, the level of this tax credit has been either 15% or 25%, but in order to get entitlement to the higher rate households have been required to undertake at least two elements of energy conservation, called a bouquet de travaux. The lower rate has only required one element, but has been subject to means testing.
From 1st September 2014, this rule has been set aside, with a single rate of 30% available to all households, who only need do a one element of energy conservation.
Under the new format the CIDD will become known as the Crédit d’Impôt de la Transition Énergétique (CITE).
Most forms of energy conservation works are eligible for the CITE, such as loft insulation, double glazing, wall insulation, central heating controls, condensing boiler, combined heat and power. However, the installation of solar panels is no longer considered eligible expenditure.
There are maximum limits to the amount of the works for which tax credit that can be granted. The maximum for one person is €8,000, and €16,000 for a couple, which is increased by €400 for each additional person in the household. That makes a maximum tax credit of around €5,000.
In order to obtain access to the tax credit you are required to have the work carried out by a building professional. DIY works are not eligible.
From 1st January 2015, households will be required to use contractors who have been certified Reconnu Garanti Environment (RGE). Until this date, it is possible to use any business registered contractor.
The CIDD is only available for the principal residence, so second home owners and landlords cannot apply.
In addition to tax credits there are two small grants that are available on a means tested basis.
These grants are called prime à la rénovation, amounting to either for €1,350 or €3,000, depending on a test of resources.
Covering several types of work, such as insulation and improved heating, the government has stated that around two-thirds of all households should be eligible for at least one of the grants.
The conditions of eligibility are not quite the same for each grant, with different income thresholds and works.
Interest Free Loans
An interest free 'eco' loan of up to €10,000 is also available. No test of resources is necessary, unless you also seek the loan alongside the tax credit.
A reduced rate of VAT of 5.5% applies to building works of energy conservation.
The rate also applies to associated works carried out with works of energy conservation.
However, only those elements eligible for the tax credit are entitled to this lower rate, which does include repair and maintenance.
Local Rates Exemption
A full or partial exemption against the taxe foncière for up to 5 years is available in certain areas, both for energy conservation to existing homes and to those new homes constructed to an energy efficiency standard that is higher than the regulations currently in force.
The eligible works are broadly those that also qualify for the tax credit.
You might be best advised to discuss all of these tax breaks with an official adviser, which you can do by ringing 0810140240 (France), or by visiting the local office of your Point rénovation info service.
For the latest in-depth analysis, and access to a Helpline, subscribe to our news service at France Insider.
France Insider is a subscription-based offer which has replaced our previous free Newsletter.