Tax Credits in France for Home Energy Conservation
Grants for energy conservation works have not escaped budget cuts, but they are also now available with an interest free loan, and if you are undertaking renovation works they can still make a very useful contribution to the funding package.
This tax credit actually comes in the form of a grant if you pay no French income tax, and is available only to French residents.
For eligible households it is also available with an interest free loan up to €30,000.
Tax credits are available for heating and energy saving works to your French home.
A ‘tax credit’ entitles you to a payment by the tax authority, even if you pay no income tax wheras ‘tax relief’.offers only a reduction in the amount of income tax payable,
If are eligible to receive a greater sum than you actually pay in tax, the taxman will send you a cheque for the balance.
The allowance is called crédit d’impôt développement durable.
It is only available to those who own a property in France as their principal home, so second home owners are not eligible.
Landlords of unfurnished accommodation are also eligible, provided the tenant (who must not be a member of their family) occupies the property as their principle home, and the landlord lets the property for at least 5 years.
The eligible works include most types of home energy conservation, provided the installation meets agreed performance standards. You need to discuss these standards with your installer to make sure the works comply with the regulations.
In most cases the tax credit is only available for the costs of the materials, and only then provided they are purchased and installed by a registered artisan or company. You are not eligible for the tax credit if you purchased the materials yourself, or you undertook the installation works.
All types of residential property are eligible for the tax credit, although in relation to thermal insulation and condensing boilers the property must be at least two years old.
Energy Conservation Tax Credits
The main works for which the tax credit is granted, and the percentage tax credit that applies, for 2011 and 2012 are as follows:
Type of works |
Rate 2011 |
Rate 2012 |
Package 2012 |
| ALL PROPERTIES | |||
| Photovoltaic Solar Panel | 22% | 11% | 11% |
| Wind/Thermal Solar/Hydraulic Power | 45% | 32% | 40% |
| Heat Pump Air-Water | 22% | 15% | 23% |
| Thermodynamic Heat Pump | 36% | 26% | 34% |
| Geothermal Heat Pump | 36% | 26% | 34% |
| Combined Heat and Power (Cogeneration) | 0% | 15% | |
| Wood Pellet Boiler (New Installation) | 22% | 15% | 23% |
| Wood Pellet Boiler (Replacement) | 36% | 26% | 34% |
| Wood Stove (New Installation) | 22% | 15% | 23% |
| Wood Stove (Replacement) | 36% | 26% | 34% |
| Energy Survey (DPE) | 45% | 32% | |
| PROPERTIES AT LEAST TWO YEARS OLD | |||
| Condensing Gas Boiler | 13% | 10% | 18% |
| Loft/Floor/Wall Insulation | 22% | 15% | 23% |
| Front Door Insulation | 0% | 10% | |
| Combined Heat and Power (Gas) | 0% | 17% | 26% |
| Thermostatic Controls/Equipment | 22% | 15% | 23% |
| Rainwater Harvesting System | 22% | 15% | |
| Double Glazing* | 13% | 0% | 10% |
The column ‘Package 2012’ concerns the rate available where are least two elements are undertaken as part of a package of works – bouquet de travaux. The basic rates are increased by 8 percentage points. However, not all works are eligible for the package, as some can only be included if the property is at least two years old, but it clearly makes sense to consider at least two elements of energy conservation to obtain the higher rates then available.
The tax credits for thermal insulation and double glazing are not available for new properties under the course of construction. Double glazing is also only available as a package with other works.
If in doubt (and the regulations are quite complex), you should contact your local energy efficiency office, the Agence de l’Environnement et de la Maîtrise de l’Energie (ADEME).
There are maximum limits on the level of the tax credit that can be granted, although these are quite generous. Thus, the maximum for one person is €8000, and €16,000 for a couple, which is increased by €400 for each additional person in the household. The allowance can be received over a five year period. No means testing is carried out.
In order to claim the tax credit, you need to send in the invoice from the builder with your tax return. You may not receive your tax credit for a year or more after you carried out the works, so you need to be budget accordingly.
An interest free loan (Eco Prêt) for the cost of works of home energy conservation is available
The works can include loft insulation, and other types of work as listed above, but must be a package of works (bouquet de travaux), not a single element.
The amount of the loan is up to €20,000 for two elements of energy conservation, and up to €30,000 for three or more.
Apply to ADEME. After completing a form (which can be downloaded from their website) and obtaining one or more estimates, you then need to make formal application to your bank.
This loan is available with the tax credits provided your income is less than €30,000.
There are also interest free mortgages available through the high street banks for works of home energy conservation. (l’éco prêt à taux zéro)
These mortgages are not subject to any test of resources.
There is partial (50%) or full exemption from the taxe foncière 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.
This exemption is at the discretion of the local authorities, although it is widely adopted.
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.
There is also a surprising number of local, departmental, or regional councils who offer grants or loans towards energy saving equipment, notably towards the installation of solar panels.
Check with your local mairie, or the web site of your Conseil Régional.
| With the kind permission of French-property.com |
