France updates reduced VAT rates for housing renovation works

The Direction générale des finances publiques has published a coordinated update of BOFiP VAT doctrineImpots following the public consultation opened on 22 October 2025, consolidating the reduced rates for renovation and energy-efficiency works on dwellings completed more than two years agoImpots: 10% under Article 279-0 bis of the code général des impôts for improvement, conversion, fitting-out and maintenance worksImpots, and 5.5% under Article 278-0 bis A for energy-renovation services covering installation, fitting, adaptation or maintenance of materials and equipment that save energy or use renewables through better insulation, heating, ventilation or domestic hot-water productionImpots, whose content and performance levels are set by the arrêté of 4 December 2024Impots.

Article 32 of the loi de finances pour 2025 removes from both reduced rates any works comprising the supply or installation of a boiler capable of using fossil fuels: such works fall under the standard rate, not 5.5% or 10%. The update also states the doctrinal legal basis — France's exercise of point 10 of Annex III to Directive 2006/112/EC — and excludes works falling under other Annex III points, notably public-building construction and renovation, window cleaning and private-home cleaning, and solar-panel supply and installationImpots, though 5.5% may apply to the latter under a separate provisionImpots. For photovoltaic installations quoted, accepted and part-paid or financed before 1 January 2026, businesses may continue to rely on the prior comments even where the works are carried out later, for example during 2026Impots.

Article 41 of the loi de finances pour 2025 replaces the written attestation with direct client certification on the devis or invoiceImpots: the customer certifies that the dwelling is more than two years oldImpots, that the works will not produce a new building within two years nor increase floor area by more than 10%Impots, and — for energy works — that they are energy-renovation worksImpots. The customer keeps a copy until 31 December of the fifth year following the works and is jointly liable for additional tax if its statements prove inaccurate; the contractor keeps the document with its accounts. Operators managing a large housing stock may use an annual attestation covering the year's works and listing the buildings concerned.

The 10% rate applies to works billed to the owner, co-owners' association, tenant, occupant or their representative, and through a société d'économie mixte acting as third-party funderImpots; it does not cover works a subcontractor supplies to its customerImpots. The 5.5% energy-renovation rate, by contrast, applies regardless of the person billedImpots, so it can benefit subcontracted supplies — provided the customer gives the on-devis or on-invoice certificationImpots, failing which the standard rate applies as of rightImpots. Mixed-rate works forming one inseparable economic supply take the highest applicable rateImpots.

The annex on heating equipment confirms the reduced rate for supply and installation of non-fossil boilers, wood-burning appliances, heat pumps other than air-to-air, chimneys, fixed heaters, water heaters and similar fixed apparatus in individual houses or flats, while mobile equipment stays at the standard rateImpots. The same publication also clarifies reverse-charge arrangements for subcontracted construction works.

Legal basis: Articles 278-0 bis A and 279-0 bis of the code général des impôts, Articles 32 and 41 of Law No 2025-127 of 14 February 2025, Article 65 of Law No 2022-1726 of 30 December 2022 and the arrêté of 4 December 2024, as construed by BOI-TVA-LIQ-30-20-90-10, BOI-TVA-LIQ-30-20-90-20, BOI-TVA-LIQ-30-20-90-40, BOI-TVA-LIQ-30-20-95, BOI-LETTRE-000280 and BOI-ANNX-000203.