Rates Relief for Energy Conservation Works
Tuesday 21 September 2021
Relief from the taxe foncière is available on completion of home energy conservation works, to either the main residence or a second home.
The taxe foncière is one of the two local annual rates payable on the ownership and occupation of property and land in France.
The level of the tax varies by the size, amenities and type of your property, as well as the local council rate, so it can range from a few hundred to several thousand euros each year. It averages around €1,200 a year.
The other local tax is the taxe d'habitation, which is being phased out for principal residences by 2023, and this year only the well-healed remain liable. We covered the change in our article Abolition of Taxe d'habitation.
Full or partial relief from the taxe foncière is available for both new and existing homes, either principal residence or second home, as follows.
Property owners are eligible for between 50% and 100% exemption from the tax for a minimum period of 5 years (or greater by local council decision), for a new home built 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 council (whether mairie or inter-communal body), although it is widely adopted.
The exemption is also cumulative with the general exemption from the taxe foncière for 2 years granted to owners of all new homes and extensions, 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.
The exemption is at the rate of 50% to 100%, as determined by the local council, for a minimum period of 3 years.
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 exceeded €10,000, or €15,000 over the previous three years.
The eligible works include:* 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.
To benefit from this relief, you must send to the local tax office of the place where the property is located, before January 1st of the first year for which the for which the exemption is applicable, a declaration which sets out details of the property and all the elements justifying the nature of the expenses and their amount. There is no form to complete.
Only those materials or appliances supplied and installed by the building contractor or their sub-contractors are eligible. Accordingly, you cannot purchase your own appliances and include the cost in the calculation, even though they may be installed by the contractor.
You would be best advised to first discuss your plans with your local home improvements/energy advisory office FAIRE, a free public service, to avoid falling foul of an impenetrable set of rules. In particular, there are performance criteria that apply to the works. Alternatively, use a reputable contractor who will be familiar with the requirements.
There are a range of other exemptions unrelated to energy conservation, perhaps the most important of which for international owners of French property is the exemption for gite (meublé de tourisme) and chambre d'hôte owners in rural development areas. We say more about this in our guide Furnished Lettings and Local Property Taxes/Rates.
We would be interested in hearing of your experiences at: firstname.lastname@example.org.