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The Sustainable Development Tax Credit: The Terms and Conditions of Application
Sustainable development modalities
Ceilings on expenditure eligible for the tax advantage
For a dwelling occupied by the taxpayer, the amount of expenses taken into account may not exceed, between 01/01/2005 and 31/12/2015, € 8,000 for a single, widowed or divorced person and € 16,000 for married or civil partnership couples. This ceiling is increased by € 400 per dependant.
Sub-ceilings exist for the expenditure of thermal insulation materials for opaque walls and photovoltaic panels.
Tax benefit rate
As of 2014, the rate of the benefit is now 15% for all expenses increased to 25% as part of a work package.
For example, for thermal insulation materials for glass walls (windows); in the case of isolated expenses the rate is 15%, and increases to 25% as part of a package of works.
Year of application
The tax advantage applies differently depending on the property in which the work is integrated. Namely: either the year of completion of the dwelling (for the goods to be built), or the year of acquisition of the dwelling (for the property acquired new), or the year of payment of the expenditure (for the goods already completed).
The realization of these expenses as part of a bouquet of works can be spread over 2 consecutive years. The chargeable event for the tax credit will be realized in the year of completion of the expenses.
Imputation and recovery
The tax credit is deducted from the amount of income tax due.
If this tax benefit is greater than the amount of tax due, the excess will be returned. The tax administration may resume the tax credit in the event that the taxpayer is reimbursed the amount of expenses made within 5 years; or when the landlord does not respect his rental commitment for 5 years.
For a dwelling occupied by the taxpayer, the amount of expenses taken into account may not exceed, between 01/01/2005 and 31/12/2015, € 8,000 for a single, widowed or divorced person and € 16,000 for married or civil partnership couples. This ceiling is increased by € 400 per dependant.
Sub-ceilings exist for the expenditure of thermal insulation materials for opaque walls and photovoltaic panels.
Tax benefit rate
As of 2014, the rate of the benefit is now 15% for all expenses increased to 25% as part of a work package.
For example, for thermal insulation materials for glass walls (windows); in the case of isolated expenses the rate is 15%, and increases to 25% as part of a package of works.
Year of application
The tax advantage applies differently depending on the property in which the work is integrated. Namely: either the year of completion of the dwelling (for the goods to be built), or the year of acquisition of the dwelling (for the property acquired new), or the year of payment of the expenditure (for the goods already completed).
The realization of these expenses as part of a bouquet of works can be spread over 2 consecutive years. The chargeable event for the tax credit will be realized in the year of completion of the expenses.
Imputation and recovery
The tax credit is deducted from the amount of income tax due.
If this tax benefit is greater than the amount of tax due, the excess will be returned. The tax administration may resume the tax credit in the event that the taxpayer is reimbursed the amount of expenses made within 5 years; or when the landlord does not respect his rental commitment for 5 years.
Good to know
It is not necessary to hold an LDD beforehand to take out this loan. Be careful, we must also not confuse the sustainable development credit with the zero-rate eco-loan (More info in the article Eco-loan and tax credit: aid to finance the work). Solar panels, heat pump, insulation, everything is (almost) allowed to help protect the environment and reduce the energy bill in the long term!
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