Reduced VAT at 5.5% and 10% on renovation: conditions and certification

Quick answer. Two reduced VAT rates apply to work on homes completed more than two years ago: 5.5% for energy improvement (insulation, renewable heating, ventilation) and 10% for general improvement and maintenance (excluding large equipment and appliances at 20%). The client must provide certification before work begins; if the rate is wrong, the contractor is liable for the VAT assessment.

In the projects we support — building restoration, energy renovation, flat refurbishment — VAT errors remain a leading cause of reassessment. Contractors sometimes apply the wrong rate, confuse the conditions, or keep insufficient client certification. The result: a VAT assessment with penalties and late-payment interest.

French rules set three regimes depending on the nature of the work and the property.

On each quote, first identify the nature of the work — energy, general improvement, or creation. That classification sets the rate, and it must be documented and stated to the client in the certification.

Only energy-quality improvement work qualifies for 5.5%, under Article 278-0 bis A of the tax code and the decree of 4 December 2024 that lists it:

• thermal insulation: opaque walls and roofs, glazing, entrance doors, insulating shutters;
• renewable heating: biomass boilers, heat pumps, solar thermal systems;
• ventilation: double-flow or hygro-adjustable single-flow mechanical ventilation;
• pipe insulation for heating and hot-water networks;
• heating controls: thermostats and regulation devices;
• maintenance of eligible boilers and equipment.

Fossil-fuel boilers: excluded since 1 March 2025#

Since 1 March 2025, work involving the supply or installation of a boiler running on fossil fuels (gas, oil) is taxed at the standard 20% rate and qualifies for neither 5.5% nor 10%. This change stems from Article 32 of the 2025 Finance Law (Law no. 2025-127 of 14 February 2025).

Maintenance or repair of an existing boiler — including replacing components such as the burner or heat exchanger — remains eligible for the 10% rate, provided the operation does not result in installing a new boiler. A transitional measure protects operations covered by a dated, accepted quote with a deposit collected before 1 March 2025.

The 10% rate covers improvement, transformation, fitting-out and maintenance work that does not create a new building (Article 279-0 bis of the tax code):

• repair and routine maintenance: rendering, painting, plumbing, electrics;
• functional improvement: kitchen, bathroom, staircase, internal doors;
• interior fit-out: partitions, mezzanine, floor coverings;
• replacing windows and doors without structural change.

Exclusions from the 10% rate: large movable equipment, white goods (fridge, washing machine, hob, oven) and the share of an invoice corresponding to furniture beyond the set thresholds remain at the standard 20% rate.

Condition 1: a home completed more than two years ago#

The age is measured at the date work begins. A home completed in 2023 only opens reduced rates from the same date in 2025. Residential premises are covered (house, flat, studio), whether the home is a main residence, second home or rented out.

Condition 2: no reconstruction or creation#

Reduced rates do not apply to extension, elevation, reconstruction after demolition, or the creation of floor area. If the work amounts to producing a new building, the standard 20% rate applies.

Condition 3: no floor-area increase above 10%#

Work carried out over a maximum two-year period must not increase floor area by more than 10%. This limit prevents splitting an extension into several reduced-rate invoices.

The certification regime has been simplified: for most projects, a dated statement signed by the client on the quote or invoice now suffices, without a separate dedicated form. Before work begins, the client must certify that:

1. the property is residential;
2. it was completed more than two years ago;
3. the work is not reconstruction, an extension exceeding 10% of floor area, or elevation.

A simple, dated and signed statement is enough. Keep this certification: it is your evidence in an audit.

The contractor's liability#

The contractor is liable for the rate applied, even holding a certification. If the certification proves inaccurate (home under two years old, extension above 10%), the administration reassesses VAT at 20%, with late interest and a penalty.

A contractor recently applied 10% to work that was in fact an extension above 10% of floor area. At audit, the VAT recovery, interest and penalty came to more than €8,000 on a €40,000 (excl. VAT) project. The lesson: check the property's age and surface before signing the certification.

• Several firms on one project. Each contractor needs its own certification and invoices the rate matching its work.
• Work spread over time. Reduced rates assume work completed within a two-year window; beyond that, the later share may lose the reduced rate.
• Materials supplied by the client. The reduced rate then covers only the labour; materials bought directly by the client stay at 20%.
• Condominiums. Work on private areas opens reduced rates if conditions are met; common areas follow their own rules (consult the building manager).

1. Confusing 5.5% and 10%: re-read the definition of energy improvement before each quote.
2. Forgetting certification: simplified but still required, dated and signed.
3. Applying a reduced rate to a fossil boiler after 1 March 2025: that rate no longer exists for supply or installation.
4. Not itemising the invoice: a project mixing insulation (5.5%), kitchen (10%) and appliances (20%) must detail each line.
5. Underestimating added surface: a "minor" extension often exceeds 10%.

We supported an SME that had its premises fully thermally renovated. The contractor had applied 5.5% to everything, including a gas boiler installed after 1 March 2025. At audit, the administration restored the standard rate on the boiler. A vague certification — referring to "renovation work" without specifying its nature — reinforced the inspector's position.

Hayot Expertise advice. Before starting a project, confirm three points: the classification (energy, general improvement or structural), the home's age and surface, and the date if a fossil boiler is involved. An hour of upfront advice costs far less than a VAT assessment.