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Building & Renovation

Builder Responsible for Tax Credit Estimate

Tuesday 05 August 2014

A builder who provided incorrect advice on the level of the tax credit for solar panel installation has been obliged to compensate their client.

The installation of solar panels in France used to benefit from a tax credit, called a crédit d’impôt développement durable.

The tax credit came either in the form of a reduction in your income tax bill, or a payment if you a were not liable to tax.

Since 2014 this particular tax credit for solar panels has been abolished, but it remains in place for certain other works of energy conservation.

The calculation of these tax credits is complicated, but it is not unusual that, as part of their estimate, builders and suppliers will provide information on the likely sum.

In the light of a recent decision of the French Supreme Court, the Cour de Cassation, such a practice may well become less common in the future!

What the court decided was that the company was responsible for any errors in the provisional estimate of the amount of the tax credit.

This is despite the fact that the information provided by the installer stated that the figures were merely indicative, and invited their client to undertake their own verification.

When the client found that the amount of the tax credit was around of half that previously indicated by the installer (€3,500 rather an €7,250) she sued the company for damages and interest.

The Cour de Cassation confirmed the decision of the lower court that, as the provisional estimate provided by the installer was the determining factor in obtaining the consent of their client to the works, the installer was responsible for any errors in that calculation.

The fact that the figures were stated as being 'indicative' and that the calculation was not strictly within the competence of the installer, did not exempt them from their responsibility.

It can only be assumed that the ruling in this case sets a general principle that is likely to apply with all works of a similar nature where a tax credit is available.

You can read about the system of tax credits for energy conservation at Guide to Home Energy Conservation in France.

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