TVA on Renovating a Property in France

It's confusing even in English

I find a lot of things in France confusing and assumed that it's because my French language skills leave something to be desired.  Apparently that's not the only reason, some things are just confusing.  A friend sent me this from French News. 

Brain taxing

The tax on renovating a property has been increased from 5.5% to 19.6% in a little-discussed and for the most part unwelcome move from the government.

The increase, which could affect millions of owners of houses over two years old, was published in the 'Journal Officiel' on August 11, 2006, and is a revision of article 245 of the tax code. The changes are to take effect immediately.

To complicate the issue, work to renovate a building will incur VAT at 19.6% only if it affects more than 50% of the building. Similarly, repairs to a wall will be taxed at 19.6% VAT if it affects the whole wall, but 5.5% if only half of the wall is being repaired.

Furthermore, second œuvre work: floors, door frames, wall partitions, plumbing, electricity, heating and sanitation will only incur VAT at 19.6% if the overall work to the building requires more than two of these types of work.
The move has left both builders and property owners confused and disgruntled. Christian F told the daily  'Le Parisien/Aujourd'hui' on Tuesday December 5, "I had contacted a zinc worker in July to get him to make a zinc gutter. He predicted it  would cost around €2,800. But when I received the quote at the end of August the sum had increased to €3,354 because the tax office applied the 19.6% tax under the pretext that my house was 'valuable'. I dropped the work, I will do it myself."

Others are having similar difficulty with the new law. "The policies are so complicated that if you have a disagreement you have to go back to the tax people who take forever to respond," said Michel M, a property owner, who has been waiting for a decision on a tax dispute for more than two months.

Pascal Dagée, a carpenter in Montargis, Loiret, expressed his anger at the situation and the government that has created it: "They leave us the dirty work, making us tell clients that some work is more expensive, and they add on extra paper work and make it unnecessarily complex," he said. "I understand that the treasury coffers are empty and they are doing all they can to get some money in, but with all this complication we can't work."

Responding to the general outrage this has caused, change is already afoot. "It's true that this change in VAT has annoyed workers," said a spokesperson for the Finance Ministry, "in agreement with the Fédération national du Budget and Capeb (La Confédération de l'Artisanat des Petites Entreprises du Batiment) we have asked the government to review the current situation. New policies are being prepared for the beginning of 2007."

©FN 08/12/2006

Comments

[le Frog]

More reason for the DYI movement to continue.