Schuetz

If you are doing renovations on a property in France, you should be aware of a tax concession which allows you to reduce the sales tax on materials from 19.6% to 5.5%, thereby saving you 14.1%. On small items this may not seem much, but if you were doing a major renovation of 50 000 euros on your French property, you would save about 7 000 euros simply by taking advantage of it.

Under French tax laws, sales tax (which is know as TVA in France) is 19.6% on most items, including material for work on your house (e.g. construction, renovation or redecoration). However, if the work is done by a professional, all materials supplied by him would be taxed at 5.5% instead of 19.6%. Consequently, rather than buy the materials and the services separately, there is a strong financial benefit to having the materials purchased under the business name of the professional doing the work.

The best way to do this is to first select the tradesman who will be doing the work and then to arrange for him to buy the materials required. When doing this, ensure that he does not include a mark-up for this. In fact, given his trade discount, he should charge the same or less for materials than if you were buying them. If he does not agree to this, ask him if you can pick up the materials, but under his business name. If he does not agree to this, think about finding someone else.

Note that this discount is available only if the work is done by a registered professional or business. The quickest way to check this is to ask for their business registration number (known in France as their SIRET number) and to see their SIRET registration document.

You should also confirm that the work is eligible for the reduced tax rate. Almost all renovation and redecoration work is eligible, subject to certain restrictions. One of these is that the property must be at least 2 years old. Another is that it must be a renovation, rather than a complete rebuild. The easiest way to confirm that you qualify is to discuss the work with your tradesman and have him provide an estimate (known in France as a devis) specifying a tax rate of 5.5%.

To summarise, there are 3 key activities: ensure your work is eligible for the reduced tax rate, ensure that your tradesmen are registered, ensure that materials are purchased at cost under the business name of the tradesmen. You will then have secured the lower tax rate.

It is also worthwhile noting that this saving is worthwhile even on small projects. For example, if you bought a radiator for 200 euros and installed it yourself, the total cost would be 239.20 euros (200 euros, plus tax of 19.6 percent). However, if you hired a plumber for 25 euros to install it for you, the total cost would only be 237.38 euros (200 euros, plus 25 euros, plus tax of 5.5%). So it would be cheaper to hire a professional to do the work than to do it yourself.

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